Research On Supply Chain Decisions Considering Consumers’ Return Behavior And Loyalty

At present,manufacturers commonly use two online business modes:the wholesale mode and the agency mode.The establishment of online sales channel makes it easy for consumers to shift among different channels and increases the competition between channels.Consumers have become the most important competitive factor for enterprises in the supply chain.Therefore,how to retain consumers becomes an urgent problem for enterprises.More and more enterprises adopt loyalty reward system to cultivate consumer loyalty.In addition,the establishment of online sales channel not only increases the shopping convenience of consumers,but also makes the situation that the actual obtainment is not consistent with the expectation often occurs due to the lack of personal experience,which leads to the occurrence of return behavior.In order to reduce the uncertainty of online shopping and avoid the loss of consumers’ rights and interests,online sales enterprises provide refund guarantee service.Lenient refund policy can increase the loyalty of consumers,but it will increase the amount of potential product returns at the same time.Thus,this paper innovatively considers the impact of the gap between the actual obtainment and expected service on consumer’s return behavior,the purchase choices of the loyal consumers and non-loyal consumers,and the impacts of the refund policies on the consumer’s return behavior and loyalty,establishes mathematical models,uses the game theory and optimization theory to study the optimal strategies of the manufacturer and the retailer in the supply chain.First,considering the consumer’s return behavior caused by the gap between the expectation and the actual obtainment,the manufacturer provides the full refund policy through the direct channel,this paper compares and analyzes the impact of the expected service and the consumers’ return behavior on the strategies of the manufacturer and the retailer based on the game theory.The results find that higher consumer expectations will lead to more product returns.And the manufacturer may not get higher profit through higher wholesale price,but it can encourage the retailer to improve the service level in the traditional retail channel through part of the wholesale price subsidy,so as to reduce the amount of online product returns and increase the profit.In addition,considering the consumer’s return behavior,it is advantageous for the manufacturer to provide the full refund policy when consumers have lower preference for the direct channel or the basic return rate is lower.Second,considering the loyalty of offline consumers,the purchasing behaviors of the loyal consumers and the non-loyal consumers are analyzed,and the optimal strategies of enterprises in supply chain are studied when the direct-channel manufacturer provides the full refund policy under dual channel structure and the retailer provide the loyalty reward to the loyal consumer.The results find that the promotion of consumer loyalty can increase the profits of enterprises in the supply chain.The impact of online return possibility on enterprises’ profits depends on the loyalty of consumers.When consumer loyalty is within a certain range,the implementation of loyalty reward system will not hurt the manufacturer’s and the retailer’s profits even if the online return possibility increases.In addition,for consumers,the increase of return possibility will reduce consumer surplus,and higher loyalty is not necessarily beneficial to them,because enterprises in the supply chain may occupy part of consumer surplus by raising the retail price of the product.Finally,considering the impacts of the refund policies of the online retail enterprises on the consumers’ return behavior and consumer loyalty,the optimal strategies and profits are studied and compared under the two modes of wholesale mode and agent mode adopted by the manufacturer and different refund policies provided by the online retail enterprises.The results find that the lenient refund policy does increase consumer surplus,but it is not always the best choice for the online retail enterprises in the supply chain.The choice of refund policy for online retail enterprises depends on consumer loyalty and return rate of the product.Besides,the manufacturer’s and retailer’s choices of sales mode depend on the commission ratio and consumer loyalty of the product.And the increase of the return rate will make the manufacturer prefer the agency mode.Besides,higher commission rate does not necessarily benefit the platform retailers.When the commission ratio is relatively low,the profits of the manufacturer and the retailer as well as consumer surplus in the agency mode are higher than those in the wholesale mode,which achieves a win-win situation.