Research On Pricing Strategies Of Online And Physical Retailers With Strategic Consumers

With the rapid development of Internet and e-commerce,consumers' consumption patterns through retailers are changing.On the one hand,consumers' decision-making in the information era is strategic.On the other hand,the price war between e-commerce platform and traditional retailers is becoming more and more fierce under the new retail trend.Both traditional retailers and physical retailers are in the predicament of competitive price decision-making.Pricing strategy has become the focus of competitive decision-making between online retailers and physical retailers.Using revenue management theory,this paper studies the pricing optimization of retailers with strategic consumers when the same commodity is sold through both online and physical retailers.This study also considers the channel preference and strategic consumption behavior of consumers in the market.The online retailers provide the second stage of discount sales for strategic consumers.Both online and physical retailers have to consider consumers' strategic consumption behavior and competitive game between retailers.Firstly,this paper considers the pricing decision between online and physical retailers in competitive relationship.And the paper studies the following aspects:(1)Online retailers and physical retailers independently formulate pricing strategies without considering each other's pricing strategy.(2)Stackelberg game between online and physical retailers,in which physical retailer as the leader and online retailer as the followers of pricing decisions.We find that physical retailers have the inherent advantages of consumer channel preference over the online retailers.Online retailers and physical retailers should make decisions according to the strategy of consumers and the discount of commodity.When facing strategic consumers,the retailer's revenue will increase with the increase of strategic consumers,and decrease with the increase of consumer's strategic factors.Secondly,we also study the pricing decision-making between online and physical retailers in joint relationship.And we draw a conclusion that when the joint retailers formulate a unified pricing and promotional strategy,the joint retailers get higher profits.Finally,it is concluded that retailers should pay attention to the strategic consumption behavior in the market.Ignoring the strategic consumers in the market will lead to the loss of retailers' potential earnings.At the same time,retailers should not use malicious price reduction to attract consumers,but make reasonable pricing and promotion decisions according to the nature of the market and consumers.