Retailers' Multichannel And Service Effort Strategies In The Duopoly Market

Online retailing can quickly expand the market share and make it easier for the retailer to attract more consumers.More and more retailers are starting to add online channel to expand the service boundary of themselves.The prosperity of domestic e-commerce in the past 10 years is the symbol of the rise of online retailing.In addition,we also noticed another phenomenon.2017 was called the first year of "new retail",many retail giants began to re-layout conventional retailing.Their aim is to improve the consumers'shopping experience.But providing a good service experience requires additional costs.In this paper,the main research question is that there are two retailers with different operational efficiencies in the market.They can choose different channel strategies and service effort strategies.In the equilibrium,how will these two retailers choose their channel strategy and service effort strategy to maximize their profits?We have established a three-stage game model.Retailers at both ends of the Hotelling Line simultaneously make channel decisions,service levels decisions and pricing decisions in sequence.The paper solves the subgame perfect Nash equilibrium of the model using backward induction and numerical calculation.The result of the model reveals that in different situations,two retailers may have different optimal strategies.(?)When a is relatively small,although the price coefficient for improving the service effort is small,adding extra services will lead to a vicious competition like the "arms race".The optimal strategy at this time is that both retailers adopt traditional channels and do not provide additional services.(?)As a increases,the choice to provide additional services may begin to become an equilibrium solution.When it comes to the channel strategy,it is slightly different for high-cost retailer and low-cost retailer.In all equilibriums,high-cost retailer will not choose a multi-channel strategy.He will decide whether to provide additional services based on the level of ?.The low-cost retailer is more likely to make changes.He will be more willing to adopt multichannel strategy and provide additional services.The conclusions of this paper have deeper practical significance.With the development of society,the competition of retailing will become more intense.Retail competition will also shift from simple and crude price competition to multi-dimensional competition based on products and services.Companies can maintain their position in the market by improving the comprehensive competitiveness of products and services.