Optimal Internet of Things Technology Adoption Decisions and Pricing Strategies for High-Traceability Logistics Services

Abstract

The Internet of Things (IoT) technology-based tracking system can reduce freight loss/damage during delivery, thereby avoiding wasting social resources. In this study, we address the issue of whether an E-retailer with a logistics arm should provide high-traceability logistics value-added service (based on IoT technology) in two customer segments and analyze their pricing decision. We found that companies always adopt IoT when equipment operation cost is low and not when the cost is high. Otherwise, the optimal IoT adoption strategy for a company depends on multiple factors, for example, the internal operation efficiency of a company. Providing high-traceability service as one kind of public service does not necessarily optimize social welfare even if the overall delivery failure is reduced. The customers’ preference for traceability significantly affects the company’s decision. Hence, we suggest that the company should implement a comprehensive investigation before launching a specific strategy.

A systematic and critical review of Internet of Things in contemporary hospitality: a roadmap and avenues for future research

“…There is an ongoing need to renew radio-frequency identification tags because they handle waste bins frequently, therefore operating expenses are increased, as well dynamic or automatic weight sensors could cause errors and consume more time than static or manual weighing method (Wen et al , 2018). Based on operating costs and internal efficiency, Zhang and Liu (2021) found that enterprises adopt IoT. In the foodservice industry, some of the challenges encountering the adoption of IoT are the high cost and the lack of accurate design algorithms regarding the available smart refrigerators (Jain et al , 2022).…”

“…By using IoT technology-based tracking system, Zhang and Liu (2021) highlighted that cargo loss or damage could be avoided during delivery. By adopting IoT-based multitemperature delivery planning system, perishable food e-orders could be handled effectively.…”

Value‐Added Service for Fashion Product Supply Chain with Overseas Warehouse Logistics Outsourcing

“…However, its distribution destination is limited, and it is preferable only for some large-size CBEC sellers (Sun et al, 2017) [12]. To settle the drawbacks, OWL emerges as its improvement and innovation of the existing cross-border logistics models with the application of new information technology [13], and OWL is used, especially for products with the characteristics of obsolescence, such as fashion items and 3C items (Giufrida et al, 2020) [14].…”

“…As for the operation of the OWL, it is subject to some regulatory barriers, customs clearance, foreign-language communication, and returns handling, in addition to shipping cost, delivery cost, and delivery options (Gomez-Herrera et al, 2014; Giufrida et al, 2020) [14,15]. International outsourcing of OWL is likely to increase, to handle e-commerce shipments (Morganti et al, 2014; [13,16], to reduce the risks of the investment in foreign market logistics assets, and clear the local knowledge barriers (Shi et al, 2016;Ren et al, 2020) [17,18], as well as to minimize operating costs and carbon emissions and to improve service level (Liu and Lyons, 2011; [19][20][21]. Here, we focus on an integrated OWL, which provides one-stop control and management service for frst-way transportation, warehousing, sorting, packaging, goods delivery, and customs declaration/customs clearance, established and operated by the third-party logistics provider, as well as supply chain optimization, goods identifcation, anticounterfeiting traceability (Lee and Yeon, 2021) [22], logistics real-time tracking, rapid response to consumer demand, customized solution, and other services (Wang, 2018) [23].…”

“…Te aforementioned VASs are extended from the manufacturers' service, the retail service, or the platform service, rather than VAS from the CBEC logistics integrator. Even if Wang et al (2021) [33] considered the VAS of reduction in customer cycle time by 3PL, and Zhang, Liu (2021) [13] considered the VAS of high traceability logistics service, their research did not involve comprehensive VAS level.…”