Research On The Pricing Of Online Retailers To Reduce Return Rate Under The Store Assistant Service

Online shopping are increasingly popular under E-commerce environment.Customers,however,can not touch or feel a product before they purchase online so that it's uncertain whether they will like it.To encourage the purchase,retailers accept the return which can expand the market demand at the cost of return processing and the reputational damage.In order to reduce costs and improve demand,store assistant services reducing the return rate are offered by online retailers,which have an immense impact on profit with the increasing costs.Based on this,it will be a theoretical and practical problem considering the online retailer pricing strategy under reduce the rate of return of service.For this problem,in this paper,we analyse the existed research about return management and pricing in the online retailing industry.and summing up of the related theories including game theory and pricing.Regard this as guidelin,we study pricing strategy for store assistant services reducing the return rate are disscused by means of mathematical modeling and simulation method.At first,in a non competitive environment,we develop a basic pricing model with store assistant services reducing the return rate.In addition,for competing retailers who face customer returns,we develop Bertrand and Stackelberg pricing game model to examine when retailers can survive and what pricing strategy they should implement in a competitive market with store assistant services reducing the return rate.We identify he existence conditions of a Nash equilibrium among competing retailers.Then we compare with two retailer's equilibrium price and profit and discusse the influence of the store service the level of retailers' pricing decision,gives the influencing factors of retailer service level.More over,we compare the pricing strategies of two different game structures,and analyze the preference of online retailers to the pricing game model.At last,the numerical simulation method is used to make an analysis of the results.After those studies,results shows that online retailer which accept customer returns can profit from store assistant services reducing the return rate,and the retailers optimal retail price increases with decreasing rate of return of service level and service level increases.One more,the selection of service cost coefficient and the expected return processing cost effect.On the other hand,under the environment of competition,retailers in the pricing process prefer choosing Stackelberg pricing game.Optimal retail price of online retailers,is positively related to the market demand and the level of service,and,the output efficiency is positive when service input is in a certain range.On the other hand,we identify the service level of retailer is affected by the choice of service cost coefficient and customer return rate.This paper studies is typical of the current era,and can provide useful guidance and reference for online retailers accepting returns in pricing strategies.