The Effect of Multichannel and Omnichannel Retailing on Physical Stores

• 成果类型: Article
• 署名作者: Gao, Fei; Agrawal, Vishal V.; Cui, Shiliang
• 署名单位: Indiana University System; IU Kelley School of Business; Indiana University Bloomington; Georgetown University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.3968
• 发表日期: 2022
• 页码: 809-826
• 关键词: Retail operations; omnichannel; strategic customer behavior; product valuation uncertainty

摘要

Most retailers today sell products through an online channel in addition to traditional physical stores. We investigate how such a multichannel or omnichannel retailer should decide the number and size of physical stores. We show that a higher return rate for online purchases can incentivize the retailer to have fewer physical stores that are larger in size. As online shopping becomes more convenient, a retailer may prefer to have more physical stores that are smaller in size. We also study the effect of three popular omnichannel strategies that involve changes of the physical stores' functions: (i) showrooms only display products for customers to inspect before they purchase online, removing fulfillment from physical stores; (ii) return flexibility expands the functionality of physical stores by allowing customers to return online orders at them; and (iii) fulfillment flexibility expands functionality by allowing customers to pick up products purchased online at physical stores. We show that when the physical stores are given fewer (more) functions, as with the showroom (return or fulfillment flexibility) strategy, the omnichannel retailer may find it optimal to increase (reduce) the number and/or size of the physical stores.