An Inventory Decision Model of BOPS Retailing Considering Cross-selling

Omnichannel retailing has been getting more and more attention as people’s buying habits become more diverse. BOPS (Buy-on-line, Pick-up-in store) is an important pattern of Omnichannel retailing which has significant impacts on a cross-selling effect and inventory decisions. This paper explores this implementation with cross-selling from a perspective of inventory management by developing and analyzing a mathematical model based on EOQ model. After series of numerical experiments, we found that firms in a perfectly competitive market have motivations to launch BOPS services in most cases, especially when the supply chain structure is centralized. Furthermore, in a decentralized supply chain, if the manufacturer bears the inventory costs generated in B&M stores according to the proportion of BOPS sales when the inventory capacity is not big enough, the retailer can shift a part of costs to the manufacturer by deliberately making biased inventory decisions, and this cost shifting may damage the manufacturer’s motivation to implement BOPS where the cross-selling effect is powerful enough

Integration of Online and Offline Channels in Retail: The Impact of Sharing Reliable Inventory Availability Information

Using a proprietary data set, we analyze the impact of the implementation of a “buy-online, pick-up-in-store” (BOPS) project. The implementation of this project is associated with a reduction in online sales and an increase in store sales and traffic. These results can be explained by two simultaneous phenomena: (1) additional store sales from customers who use the BOPS functionality and buy additional products in the stores (cross-selling effect) and (2) the shift of some customers from the online to the brick-and-mortar channel and the conversion of noncustomers into store customers (channel-shift effect). We explain these channel-shift patterns as an increase in “research online, purchase offline” behavior enabled by BOPS implementation, and we validate this explanation with evidence from the change of cart abandonment and conversion rates of the brick-and-mortar and online channels. We interpret these results in light of recent operations management literature that analyzes the impact of sharing inventory availability information. Our analysis illustrates the limitations of drawing conclusions about complex interventions using single-channel data

Ubiquity of offerings : the development and validation of a scale to measure omnichannel perception

This thesis aims to better understand how customers perceive omnichannel, developing a scale for this. This channel strategy, which is an upgrade of multi and cross-channel, brings the ubiquity of offerings, that is, the integration and interaction of marketing channels, providing a unique shopping experience. Although it has been a widely studied phenomenon, Marketing Science Institute considers it one of the top research priorities (MSI, 2018), reinforcing the need of studies such as this. Unraveling the customer point of view, this study attempts to bring a holistic perspective of the subject. Having the theory about omnichannel along with the ten items brought by Li et al. (2017) to measure Cross-Channel Integration as a starting point, this research began with a qualitative inquiry, using means-end theory and interviewing 29 participants in order to form attribute-consequencevalue chains and understand the reasons why customers use more than one channel in the same shopping journey. After that, a panel of experts was performed, contemplating two national and three international scholars. These two steps were crucial to form the steps that took place thereafter. Three rounds of quantitative surveys were conducted using online questionnaires in order to reduce the number of variables into an ideal number of factors. After exploratory factor analysis and confirmatory factor analysis, the final measurement tool had 17 items in 5 factors: post-purchase services, promotions, BOPS, advantages and interactions with the retailer. Also, the predictive power of the scale was tested, and different simulations showed new perspectives for future studies. Specially the first factor was strongly related to loyalty outputs, that are satisfaction with the ubiquity of channels, recommendation and intention to use more channels from that retailer. Besides the relevance for marketing theory concerning channels, the research also constributes for retailers that seek to stand out for adopting omnichannel.Esta tese busca entender melhor como os clientes percebem o omnichannel, desenvolvendo uma escala para ele. Essa estratégia de canal, que é uma atualização de multi canal e cross-channel, traz a onipresença de ofertas, ou seja, a integração e a interação dos canais de marketing, proporcionando uma experiência de compra única. Embora tenha sido um fenômeno amplamente estudado, o Marketing Science Institute o considera uma das principais prioridades de pesquisa (MSI, 2018), reforçando a necessidade de estudos como este. Desvendando o ponto de vista do cliente, este estudo tenta trazer uma perspectiva holística do assunto. Tendo a teoria sobre omnichannel juntamente com os dez itens trazidos por Li et al. (2017) para medir a integração entre canais como ponto de partida, esta pesquisa começou com uma investigação qualitativa, usando a teoria meios-fim, e entrevistando 29 participantes, a fim de formar cadeias de atributo-consequência-valor e entender as razões pelas quais os clientes usam mais que um canal na mesma jornada de compra. Em seguida, foi realizado um painel de especialistas, contemplando dois acadêmicos nacionais e três internacionais. Esses dois passos foram cruciais para formar os passos que ocorreram posteriormente. Três rodadas de pesquisas quantitativas foram realizadas usando questionários on-line, a fim de reduzir o número de variáveis em um número ideal de fatores. Após análise fatorial exploratória e confirmatória, a ferramenta final de medição teve 17 itens em 5 fatores: serviços pós-compra, promoções, BOPS, vantagens e interações com o varejista. Além disso, o poder preditivo da escala foi testado, e diferentes simulações mostraram novas perspectivas para estudos futuros. Especialmente, o primeiro fator estava fortemente relacionado aos resultados de lealdade, que são a satisfação com a onipresença dos canais, a recomendação e a intenção de usar mais canais do varejista. Além da relevância para a teoria do marketing em relação aos canais, a pesquisa também contribui para varejistas que procuram se destacar por adotar o omnichannel

Omnichannel Retail Operations with Buy-Online-and-Pick-up-in-Store

Many retailers have recently started to offer customers the option to buy online and pick up in store (BOPS). We study the impact of the BOPS initiative on store operations. We build a stylized model where a retailer operates both online and offline channels. Customers strategically make channel choices. The BOPS option affects customer choice in two ways: by providing real-time information about inventory availability and by reducing the hassle cost of shopping. We obtain three findings. First, not all products are well suited for in-store pickup; specifically, it may not be profitable to implement BOPS on products that sell well in stores. Second, BOPS enables retailers to reach new customers, but for existing customers, the shift from online fulfillment to store fulfillment may decrease profit margins when the latter is less cost effective. Finally, in a decentralized retail system where store and online channels are managed separately, BOPS revenue can be shared across channels to alleviate incentive conflicts; it is rarely efficient to allocate all the revenue to a single channel

Facility selection model for BOPS service for an omni-channel retail chain

Retail sector around the world is going through a transition due to digitalization. Customers now demand convenience of online channel with instant fulfilment of offline channel. As a result, the concept of omni-channel retailing has come into existence. In omni-channel retailing, both the channels of a firm are fully or partially integrated. There are many strategies that may be developed by retailers for efficient functioning of the omni-channel retail chain. The choice of such a strategy depends upon the comparative benefits that can be derived from them. One such strategy gaining immense attention of retailers is the Buy Online Pickup in Store (BOPS) strategy. In order to understand this BOPS, we conducted a detail case study of an Indian multi-channel retail chain who is considering the option of launching BOPS option in few of its retail stores. The focus is to evaluate and select a fixed number of operational retail stores to also act as pick-up points for online deliveries. K-means clustering is utilized for formation of retail zones as per the number of retail stores to be selected. The retail stores in each zone are evaluated on the basis of a number of criteria such as demand, inventory carrying capacity, cost, and population characteristics using Analytical Hierarchy Process (AHP) and Complex Proportional Assessment-Grey (COPRAS-G). Based on these evaluations the best suitable retail store is selected for expansion from each zone. The result implications drawn in the study can provide an understanding of the future strategies that can be developed by the decision makers of the firm for launching the BOPS option. The study can also be beneficial to other Indian retail firms who can derive meaningful insights from the findings