Omnichannel retail operations with consumer returns and order cancellation

Zhang, Juzhi; Xu, Qifa; He, Yi

doi:10.1016/j.tre.2018.08.006

Cited by 96 publications

(50 citation statements)

References 41 publications

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“…The following aspects can be considered in future research. First, in this paper, we consider the operating cost of the BOPS strategy but do not consider the potential benefits of this strategy, such as the crossing-selling profit [19,26]. Second, this paper only considers one retailer.…”

Section: Discussionmentioning

confidence: 99%

“…Considering consumer returns, Liu and Xu [25] investigated the effects of BOPS option on retailer's optimal pricing and ordering decisions, and the results show that the optimal price, order quantity, and profit increase after adopting the BOPS option. Some studies also focus on other omnichannel retailing strategies, such as ROPS [26], Ship from Store [27], and Store return [28,29]. Differently from the abovementioned studies, this paper explores the effects of the BOPS option on the solution of overpackaging and environmental impact.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In practice, many retailers adopt identical prices for products in online and offline channels. Following the studies of Zhang et al [26] and Nageswaran et al [39], we assume the retailer sells its product at price p through both channels, and we assume the marginal cost for the product to be zero. This assumption is also widely used in operations management literature [40,41].…”

Section: Modelmentioning

confidence: 99%

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Impacts of the BOPS Option on Sustainable Retailing

2020

Sustainability

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This paper focuses on the value of an omnichannel retailing option, Buy-Online-and-Pick-up-in-Store (BOPS), in reducing environmental impact. Analytical models were established to explore the impacts of the BOPS strategy on the pricing and expected profit of the dual-channel retailer as well as the environment. The equilibrium solutions under dual-channel and omnichannel scenarios were obtained. Then, we considered the impact of loyal store consumers in the extended model. We find that the retailer will increase the product price after adopting the BOPS strategy. Our analytical results also show that when the operating cost of the BOPS strategy is relatively low, the total demand under the omnichannel scenario is greater than that under the dual-channel scenario and vice versa. In addition, this strategy can always reduce the environmental impact in terms of the pure online demand. Finally, when the operating cost is lower and the fraction of consumers without channel preference is higher, the retailer can benefit from the BOPS strategy. In this case, the BOPS strategy can achieve profit improvement and environmental impact reduction.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Modelmentioning

confidence: 99%

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Impacts of the BOPS Option on Sustainable Retailing

2020

Sustainability

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“…() investigated firms’ optimal ordering policies for deteriorating items within a no‐reason return period; Choi and Guo () studied the impact of consumer returns on responsive supply in fashion mass customization systems; Zhang et al. () explored online‐only and omnichannel strategies of firms while considering consumer returns and order cancellation. Besides no‐reason‐full‐return policies, many firms offer partial return policies (Hess et al., ; Shulman et al., ; Feng et al., ).…”

Section: Literature Reviewmentioning

confidence: 99%

Whether a retailer should enter an e‐commerce platform taking into account consumer returns

Cao

et al. 2020

Int Trans Operational Res

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Considering consumers are increasingly shopping online nowadays and the online sales market is dominated by e‐commerce giants, traditional retailers need to choose whether to enter e‐commerce platforms. Moreover, traditional retailers need to determine whether to offer offline return services considering online return services are very popular. To address these challenges, we explore a retailer's optimal offline return strategy and channel choice of whether or not to enter a platform in the contexts of symmetric information and asymmetric information, respectively. We present conditions for the retailer to share information. Interestingly, we find that the retailer in some conditions has no motivation to improve customer satisfaction rate of offline store. Most important, we find that the retailer's channel choice depends on the magnitude of the annual service fee that is affected by offline return strategy and asymmetric information, and the offline return strategy depends on the magnitude of the average residual value of returned products.

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“…According to reference [53], we can get the consumer surplus when purchasing under different channels as shown in Table 2. Table 2.…”

Section: Notations Definitions P Jmentioning

confidence: 99%

Joint Decision on Pricing and Ordering for Omnichannel BOPS Retailers: Considering Online Returns

Liu

2020

Sustainability

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Uncertainty in demand and high online return rates tend to generate a large inventory backlog after a hot selling season. Some well-known companies such as Burberry and H&M choose to burn these backlogs, which is very unfavorable to the sustainable development of enterprises and society. The omnichannel BOPS (Buy Online and Pickup in Store) provides consumers with a new and convenient choice of purchasing channels. Considering the probability of online return, we build expected profit models for retailers before and after opening a BOPS channel based on consumer surplus and purchase ratio via an online channel, store channel, and BOPS channel. Then, we prove the existence of optimal solutions and obtain the joint optimization decision on pricing and ordering. The results show that, under certain conditions, when the proportion of online channel buyers increases, the retailers' optimal decision before opening a BOPS channel is to reduce the price and increase the order quantity, and the retailers' optimal decision after opening a BOPS channel is to simultaneously reduce the price and the order quantity. Whether or not a BOPS channel is opened, when the purchase proportion of store channel increases, the optimal decision of retailers is to increase the price and order quantity at the same time. Furthermore, when the online return rate, the cost of online shopping, the inconvenient cost of the store channel, and the inconvenience of the BOPS channel relative to store channel increase, the optimal decision of retailers is to simultaneously reduce the price and order quantity. Moreover, when the maximum psychological value of the product increases, the optimal decision is to reduce the order quantity while increasing the price. In addition, the opening of a BOPS channel increases optimal price, optimal order quantity, and maximum expected profit.

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Omnichannel retail operations with consumer returns and order cancellation

Cited by 96 publications

References 41 publications

Impacts of the BOPS Option on Sustainable Retailing

Impacts of the BOPS Option on Sustainable Retailing

Whether a retailer should enter an e‐commerce platform taking into account consumer returns

Joint Decision on Pricing and Ordering for Omnichannel BOPS Retailers: Considering Online Returns

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