Integration of online and offline channels in retail: feasibility of BOPS?

Abstract

Purpose As one of the omnichannel sales models, “buy online and pick up in store” (BOPS) not only is used in the commercial field but also has gradually attracted many scholars’ interests. However, although there are numerous research ideas, most of the current work is still limited to theoretical and empirical research, and few scholars study BOPS through models. This paper aims to discuss the best market conditions and opportunities for the implementation of BOPS against the backdrop of omnichannel by means of mathematical models and data simulations and discuss the optimal price–service strategies under different sales models. Design/methodology/approach First, from the perspective of different consumer shopping types, this paper separately divides consumers into different groups in traditional “dual channel” and BOPS models. Then, the authors analyze the impact of company market size, consumer service sensitivity and the scale of BOPS on companies’ strategies and the profit of the supply chain. Subsequently, they conduct an empirical analysis through specific values. Finally, the authors further expand the model on the basis of the original research, and discuss the retailer’s fairness concerns and unit compensation strategy to ensure that the research content is more rigorous. Findings It is observed that whether companies adopt BOPS depends on consumers’ service sensitivity degree and the scale of BOPS consumers and online retailers: when the sensitivity and the proportion of online consumers are high or the number of BOPS consumers is large, it is more advantageous for companies to implement BOPS. Moreover, companies should not only consider the market scale and production cost but also have a precise orientation of consumers’ experience sensitivity and willingness to engage in extra consumption when making price and service strategies. At the same time, the compensation strategy of companies and the peer-regarding fairness concern behavior of offline retailers will affect the optimal price and service strategy in the BOPS model. Social implications These results provide managerial insights for companies preparing to implement BOPS and promote the development of relevant theories in the channel field. Originality/value At present, most of the research on BOPS is based on empirical reviews. However, this paper analyzes the applicability and feasibility of implementing BOPS by using specific models, and it will provide some reference for companies preparing to implement BOPS. In addition, this paper also discusses the unit compensation strategy and peer-regarding fairness concern behavior in the BOPS model, which have not been studied by relevant scholars.