Open AccessOptimal Pricing and Customer Experience Investment Strategy in an Omnichannel Supply Chain under BOPS
Author(s) -
Guitao Xu,
Kai Kang,
Mengyao Lu
Publication year - 2022
Publication title -
ieee access
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.587
H-Index - 127
ISSN - 2169-3536
DOI - 10.1109/access.2022.3231482
Subject(s) - aerospace , bioengineering , communication, networking and broadcast technologies , components, circuits, devices and systems , computing and processing , engineered materials, dielectrics and plasmas , engineering profession , fields, waves and electromagnetics , general topics for engineers , geoscience , nuclear engineering , photonics and electrooptics , power, energy and industry applications , robotics and control systems , signal processing and analysis , transportation
This study investigates an omnichannel supply chain comprising a manufacturer with online retailing and a physical retailer that provides a shopping experience to consumers. To enhance this shopping experience, the supply chain also offers buy-online-and-pick-up-in-store (BOPS) services. A model was constructed considering cost-sharing of customer experience investment to improve the performance level of the omnichannel supply chain. The analysis examined the optimal choice of unified pricing or differential pricing for online and offline channels using the Stackelberg game model. The results show that the implementation of a cost-sharing cooperation contract can increase customer experience investment and consumer demand and improve supply chain performance. Specifically, the pricing strategy was associated with channel competition and the customer experience factor. The unified pricing strategy performed better when competition intensity was lower, and the differential pricing strategy performed better when competition intensity was higher. Further, the study’s consideration of customer experience investment level as an endogenous variable has not been done in previous studies, which contributes to its novelty. Therefore, in the omnichannel supply chain, excessive channel competition should be avoided, and cooperative investment in the customer experience among supply chain actors should be encouraged.