Abstract
In this paper, we model the competition between two firms that each firm can choose a “buy online and pick up in store” (BOPS) channel strategy or an offline channel strategy. We find out when it is optimal for a retailer to offer a BOPS channel by comparing the equilibrium outcomes. Whether to adopt the BOPS channel depends largely on the difference between the inherent values provided by two firms. Further, we prove that a prisoner’s dilemma exists under certain condition when two competing firms offer the BOPS channel. We also examine the impact of heterogeneous channel acceptance on the profits of two firms. We find that when only a firm offers the BOPS channel, the higher acceptance of BOPS means the higher profit of this firm and the less profit of its competitor. However, when both firms offer the BOPS channel, whether a firm can benefit from the increase in acceptance of BOPS depends on the inherent value it provides.
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Acknowledgments
This research was partially supported by research grant from the National Science Foundation of China (No. 71471128) and the Key Program of National Natural Science Foundation of China (No. 71631003).
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Wang, R., Chen, L., Feng, H., Nan, G., Li, M. (2019). Competitive Analysis of “Buy Online and Pick Up in Store” Channel. In: Xu, J., Zhu, B., Liu, X., Shaw, M., Zhang, H., Fan, M. (eds) The Ecosystem of e-Business: Technologies, Stakeholders, and Connections. WEB 2018. Lecture Notes in Business Information Processing, vol 357. Springer, Cham. https://doi.org/10.1007/978-3-030-22784-5_7
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