The effects of BOPS implementation under different pricing strategies in omnichannel retailing

Kong, Ruixiao; Luo, Li; Chen, Liuxin; Keblis, Matthew F.

doi:10.1016/j.tre.2020.102014

Cited by 59 publications

(39 citation statements)

References 37 publications

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“…The work [9] analyzes a Stackelberg game theoretic model involving a manufacturer and a retailer to determine how shop prices should fluctuate in response to the manufacturer's product quality and which scenarios are profitable. There is plenty of research [5][6][7][10][11][12], which is helpful in determining if it is beneficial to open the BOPS channel and start planning for a well-functioning business model, but they provide no guidance on how operations should be organized, which is vital for the long term success of the BOPS channel.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Due to the fact that this is a relatively new topic, the existing literature is limited. A literature search revealed that the majority of the focus is on marketing and management aspects such as service area [5], pricing strategy [6], and inventory levels [7], while operational optimization is rarely mentioned. As a result, it is not surprising that the retailer providing data for this study had little to no optimization in place for the BOPS in-store operations: the employees receive shopping lists in a random order, they go through the store similar to regular customers to pick up all the items, and then go to the cashier to scan the products and place them in the final bags.…”

Section: Introductionmentioning

confidence: 99%

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The Buy-Online-Pick-Up-in-Store Retailing Model: Optimization Strategies for In-Store Picking and Packing

et al. 2021

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Online shopping is growing fast due to the increasingly widespread use of digital services. During the COVID-19 pandemic, the desire for contactless shopping has further changed consumer behavior and accelerated the acceptance of online grocery purchases. Consequently, traditional brick-and-mortar retailers are developing omnichannel solutions such as click-and-collect services to fulfill the increasing demand. In this work, we consider the Buy-Online-Pick-up-in-Store concept, in which online orders are collected by employees of the conventional stores. As labor is a major cost driver, we apply and discuss different optimizing strategies in the picking and packing process based on real-world data from a German retailer. With comparison of different methods, we estimate the improvements in efficiency in terms of time spent during the picking process. Additionally, the time spent on the packing process can be further decreased by applying a mathematical model that guides the employees on how to organize the articles in different shopping bags during the picking process. In general, we put forward effective strategies for the Buy-Online-Pick-up-in-Store paradigm that can be easily implemented by stores with different topologies.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Buy-Online-Pick-Up-in-Store Retailing Model: Optimization Strategies for In-Store Picking and Packing

et al. 2021

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“…Zhang et al [22] studied the effects of "preorder-online, pickup-in-store" option in a competition context, and the results show that this omnichannel strategy is not always beneficial for retailers in this case. Kong et al [23] investigated the effects of BOPS option on retailer's optimal decisions and profit under different pricing policies. Li et al [24] studied the influences of BOPS option on the firm's cooperative advertising, and they found that the BOPS option can bring about similar incentive effects as cooperative advertising.…”

Section: Literature Reviewmentioning

confidence: 99%

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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“…Therefore, the customers can purchase the products from the two channels. We assume that: (1) the brickand-mortar store can provide online channel and offline channel; (2) each customer purchases at most one product by online or offline channel without considering shipping price [8]; (3) the dual-channel retailers employ a consistent pricing strategy and therefore the price p k denotes the selling price for both channels in the ordering period k [8,17], and the selling price is greater than shipping price p s (i.e., p k > p s ); (4) the total amount of customers is m in each ordering period; (5) shortage of the products is allowed and backlogged; (6) the customers from the offline channel bring the cross-selling profit r [16]. It is noted that the customers from offline channel can evaluate the products in reality and are easily influenced by the recommendation from the clerks at the store, while the online customers usually have a clear purpose for products and pay more attention on shipping price.…”

mentioning

confidence: 99%

“…Compared with the cross-selling profit in online channel, the offline cross-selling profit is much greater. Therefore, we only consider the offline cross-selling profit, which is consistent with [16].…”

mentioning

confidence: 99%

Optimal pricing and ordering strategies for dual-channel retailing with different shipping policies

Wang

2023

JIMO

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<p style='text-indent:20px;'>In this paper, considering dual-channel retailing (online channel and offline channel), we study the pricing and ordering problem under different shipping policies. In this research, we mainly consider three shipping policies: without shipping price (OSP), with shipping price (WSP) and conditional free shipping (CFP). Based on the principle of maximum utility, we firstly obtain the probability of demand for the online and offline channels and further model the pricing and ordering problem under the three shipping policies. Further, avoiding the curse of dimensionality, the deep deterministic policy gradient (DDPG) method is employed to solve the problem to obtain the optimal pricing and ordering policy. Finally, we conduct some numerical experiments to compare the optimal pricing and ordering quantity under the three different shipping policies and reveal some managerial insights. The results show that the conditional free shipping policy is better than the other two policies, and stimulates the increase of demand to gain more profit.</p>

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The effects of BOPS implementation under different pricing strategies in omnichannel retailing

Cited by 59 publications

References 37 publications

The Buy-Online-Pick-Up-in-Store Retailing Model: Optimization Strategies for In-Store Picking and Packing

The Buy-Online-Pick-Up-in-Store Retailing Model: Optimization Strategies for In-Store Picking and Packing

Impacts of the BOPS Option on Sustainable Retailing

Optimal pricing and ordering strategies for dual-channel retailing with different shipping policies

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