Research On Pricing And Service Strategies In Omnichannel Supply Chain Under BOPS Mode

Driven by the transformation of mobile internet and big data technology,along with the diversification and fragmentation of consumers' shopping needs,online and offline retailers have actively started to upgrade and iterate their channels.In addition to traditional e-commerce shopping platforms,retail superstores are actively exploring a variety of segmented retail formats,such as the O2O(Online to Offline)instant shopping model represented by Jingdong Home,the new retail species model represented by Boxma Fresh,and the all-category omnichannel retail model represented by Suning Tesco.The Buy Online and Pickup in Store(BOPS)model has become a classic model of offline integration in the retail industry.As the BOPS model affects channel demand and supply chain operational strategies,there are many technical bottlenecks to overcome when integrating online and offline channels,as well as the need for friendly negotiation and collaboration among supply chain members.When considering the BOPS model,companies need to face various challenges such as differentiated pricing,increased service costs in physical shops,difficulties in channel collaboration and increased channel competition.Against this backdrop,the following questions deserve attention: Firstly,should retailers and manufacturers work together to implement the BOPS model? If BOPS is implemented,what is the impact of BOPS on the operational strategies and profits of omnichannel supply chain members? Secondly,as the participants in the omnichannel supply chain are both cooperative and competitive under the model,the impact of channel power on the equilibrium strategies of members is even more pronounced,and how do different power structures affect the pricing and power decisions of supply chain members?Finally,what is the impact of the BOPS volume consolidation model on supply chain equilibrium strategies and performance when retailers and manufacturers collaborate to deliver BOPS?How can cost-sharing contracts for sales services be used to achieve omnichannel supply chain coordination under different volume consolidation models?This paper focuses on the pricing and service strategy of omnichannel supply chains under the BOPS model,and adopts a multidisciplinary research approach including game theory,optimization,management science and computer science to construct a decision model for omnichannel enterprises under the BOPS model,explore the optimal pricing and service strategy under various scenarios,and systematically analyse the effects of BOPS scale expansion factor,channel cross-price elasticity,service cost factors on the equilibrium strategy of the supply chain.The main research elements are as follows.Firstly,this paper considers an omnichannel supply chain model consisting of a manufacturer and a traditional retailer,where it is assumed that the manufacturer sells the same products through the traditional retailer as through a self-built online channel.On a dual-channel basis,and in response to the new retailing trend,it is assumed that both parties work together to implement a BOPS strategy.The main questions to consider are: How does the addition of BOPS channels to the supply chain affect the profitability of the supply chain members? How do supply chain members optimise price and service decisions in a centralised and decentralised supply chain structure,and how does the BOPS strategy affect the market demand and profitability of traditional retailers and manufacturers? A model of dual-channel and omnichannel supply chain decision-making in a centralised and decentralised structure is developed using game theory.The conditions for implementing BOPS strategies and pricing and service decisions are given from the perspective of supply chain members,and the impact of BOPS strategies on supply chain members'demand and profitability is discussed in detail.The results of the study show that with the addition of the BOPS channel to the supply chain,the retail prices of both retailers and manufacturers increase with the quality of service in physical shops,and the profits of the supply chain members also increase significantly.In the dual-channel scenario,the increase in service levels in physical shops will lead to higher retail prices for retailers to ensure a certain level of profitability,while manufacturers will adopt a low-price strategy to attract consumers and increase their market share;in the omnichannel scenario,the increase in service levels in physical shops will lead to price increases for both manufacturers and retailers to increase their profits.Secondly,this paper explores the impact of different channel power structures on online and offline retail price and service decisions when an omnichannel supply chain is in place(manufacturer and retailer collaborating with consumers to provide BOPS channels,brick and mortar,and online channels).Specifically,the following questions are answered: How do power structures influence online price and offline price and service level decisions for omnichannel supply chain products? How does the power structure affect the profitability of supply chain members and the overall profitability of the omnichannel supply chain? Is there a power structure that leads to a Pareto improvement in the profitability of supply chain members? A retailer-dominated Stackelberg game,a vertical Nash equilibrium game and a manufacturer-dominated Stackelberg game model are constructed for centralised and decentralised decision making scenarios.The impact of different power structures on the omnichannel supply chain is explored through a comparative analysis of pricing,service,demand and revenue of omnichannel supply chain members.The results show that the retailer's channel power is significantly and positively related to its revenue,and that the Stackelberg game with retailer dominance can also be profitable for the manufacturer under the exogenous wholesale price variable setting;the service level of physical shops is highest under the Nash equilibrium game structure,when the retailer tries to use high service quality to enhance the shopping experience of in-store consumers.Centralised supply chains are more likely to use high prices and lower service costs to increase total revenue than decentralised decisions.Finally,this paper addresses the omnichannel supply chain consisting of manufacturers and offline retailers with sales effort to provide BOPS services.We develop an integrated model with BOPS sales credited to the online channel and BOPS sales credited to the offline channel,explore the pricing and sales effort strategies of the supply chain under different BOPS sales integration models,and further analyse the coordination of the omnichannel supply chain based on the cost-sharing mechanism of sales effort.The results of the study show that centralised decision making in the benchmark scenario helps to improve sales effort and enhance the overall performance of the supply chain;decentralised decision making with BOPS sales credited to the online channel allows the supply chain system to make more profit.The implementation of cost-sharing contracts in different BOPS volume consolidation models can mitigate the double marginalisation effect and provide incentives for retailers to increase sales effort and achieve Pareto improvements in supply chain system revenue,provided that the participation constraint is satisfied.