Return Strategies And Channel Collaborative Decision-making For Multichannel Retail

With the development of multichannel retail in the new era,i.e.,transforming and upgrading from a dual channel form to an omichannel form,the behavioral characteristics of consumers,especially return behavior,have been changing in a subtle way.With the coexistence of multichannel retail today,how to adopt appropriate return strategies and channel collaborative strategies to win and satisfy consumers is the key to the survival and development of enterprises.To this end,this research first focuses on the initial stage of multichannel retail: dual channel retail,to study how a retailer and a manufacturer with an online direct channel should choose a corresponding return and channel collaborative strategy.Second,with the popularity of consumer returns,the return strategies may also cause a series of problems for online retailers and consumers.The contradiction of who pays for the return freight has become increasingly prominent,which has led to the emergence of return insurance.Futhermore,this research studies the decision-making problem of return strategies based on return insurance.Then,transition to the channel conflict stage of multichannel retail,combining the increasingly popular consumer return and showrooming behaviors,to study a service coordination strategy and showrooming strategy of a physical retailer and an online retailer.Finally,expand to the final stage of multichannel retail: omnichannel retail,and further study how an omnichannel retailer can implement the “preorder online,pick up and return offline” channel collaborative strategy to maximize the advantages of omnichannel when consumers are allowed to return.Specifically,the following research content is included.(1)How a retailer and a manufacturer with an online direct channel should choose money back gurantee(MBG),dual money back guarantee(DMBG)return strategies and offline to online(O2O)collaborative strategy are discussed.This study shows that although the DMBG strategy allows the retailer to return products to the manufacturer,the DMBG service makes the wholesale price premium,and the MBG strategy is more beneficial to the retailer.However,the DMBG strategy is beneficial to the manufacturer's online direct channel.Therefore,in the initial stage of establishing direct channel,the manufacturer should consider implementing the DMBG strategy to rapidly increase the market share and profit of the direct channel,and to alleviate the channel conflicts.In addition,only when the offline retailing channel fully attracts consumers to the online direct channel,so that the manufacturer's Internet service profits are relatively high,the manufacturer is willing to reach an O2 O collaborative strategy with the retailer.This also means that under certain conditions,retailers adopting the O2 O collaborative strategy and manufacturers adopting MBG in online direct channels can produce win-win results.(2)The pricing decision of the online channel based on return insurance,and the coordinated strategy of return and return insurance are explored.The research shows that the online retailer should provide MBG return service but does not need to give return insurance.In this case,the profit obtained by the online retailer is optimal.If the online retailer presents consumer return insurance,it does not increase its market share and profit,nor does it increase a consumer's utility surplus,but it will increase operating costs and lead to a higher price.The optimal strategy of an insurance provider has nothing to do with whether the insured is an online retailer or a consumer.It should remain neutral,which will help the insurance provider to gain the trust of the insured.Consumers who purchase a product when the online retailer only provide MBG return service but do not present return insurance will have the highest consumer utility surplus.(3)In the context of the multichannel coexistence and competition,how a physical retailer uses his own service advantage to respond accordingly when faced with the competitive pressure of an online retailer using him as a free showroom is discussed.Moreover,when this online retailer is forced to compete under the pressure of offline service,is she willing to reach a coordination mechanism for service cooperation with the offline physical retailer? This study has found that under certain circumstances,that is,when the service threshold is relatively high or the customized service is relatively high,the service collaborative strategy can make two retailers achieve a win-win situation.To strengthen the reliability of service cooperation,the research results suggest that online retailers should guide physical retailers to sign a long-term service cooperation strategy,so as to prevent physical retailers from widening the gap between online and offline service levels.After reaching a service collaborative strategy,as to whether the two retailers still support consumer showrooming behavior,regarding the strategy of yes or no to support consumer showrooming behavior,the research results show that with the development of the multichannel retail industry and technological advancement,the phenomenon of showrooming behavior is overwhelming.In response to consumer demand for showrooms,not only online retailers but physical retailers should also provide convenience for consumers to access showrooms.Therefore,regardless of whether consumers need a showroom or not,the strategy used by physical retailers should be a strategy to enhance the core competitiveness of their own services,rather than a strategy that directly kills consumer showrooming behavior.(4)In the context of omnichannel retail,this research discusses how an omichannel retailer should implement a POPR collaborative strategy of “purchase online,pick up and return offline” to maximize the advantages of omnichannel when consumer returns are allowed.The results of the study reveal that in a monopolistic situation,although the POPR strategy can help the retailer increase its market share,the increase in operating cost will lead to a decrease in its profit.In a competitive situation,only when the operating cost of the POPR strategy is low,the retailer implements the strategy optimally.This means that under the condition that consumers are allowed to return,if it is the initial stage of an omnichannel construction,the retailer should adopt the POPR strategy to attract consumers and compete for market share.When in a period of competition,the retailer should choose products with a lower POPR operating cost,a higher offline channel operating cost and a lower consumer return rate to implement the POPR strategy.To sum up,focusing on consumer return behavior,this research studies on the return strategy and operational coordinative strategies in the development of multichannel retail from dual channel form to omnichannel form.Relevant research results not only enrich the theory of multichannel and omnichannel retail management,but also provide theoretical methods and practical guidance for retailing business operation decisions.