Impact of BOPS and ES on Demand and Profitability: Theoretical Models and Simulation Analysis

Jinrong Liu, Haitao Sun

2022

Abstract

With the development of information technology and mobile e-commerce, more and more retailers are beginning to provide consumers with convenient buy online and pickup in store (BOPS) shopping mode. Online channel often results in high return rates due to lack of product experience, while retailers can increase consumer perceive value by providing experience services (ES) to increase their purchases. However, the provision of BOPS and ES will incur certain operating costs. This paper establishes four profit models under different BOPS opening strategies and ES service offering strategies. Then, the study analyzes and compares the impacts of BOPS and ES on retailers’ demand allocation and profitability. Finally, the simulation test is carried out by using MATLAB software. The results show that when ES is not provided before or after opening the BOPS channel, or ES is only provided after opening the BOPS channel, if the inconvenience of BOPS channel or online return rate is low, the opening of BOPS can reduce the online demand and increase the total demand and profit; when ES is provided before opening the BOPS channel and ES is not provided after opening the BOPS channel, the store demand, total demand and total profit will be reduced; when ES is not provided before opening the BOPS channel and ES is provided after opening the BOPS channel, the total demand and total profit increase more.

Paper Citation

in Harvard Style

Liu J. and Sun H. (2022). Impact of BOPS and ES on Demand and Profitability: Theoretical Models and Simulation Analysis. In Proceedings of the International Conference on Big Data Economy and Digital Management - Volume 1: BDEDM, ISBN 978-989-758-593-7, pages 947-955. DOI: 10.5220/0011359800003440

in Bibtex Style

@conference{bdedm22,
author={Jinrong Liu and Haitao Sun},
title={Impact of BOPS and ES on Demand and Profitability: Theoretical Models and Simulation Analysis},
booktitle={Proceedings of the International Conference on Big Data Economy and Digital Management - Volume 1: BDEDM,},
year={2022},
pages={947-955},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0011359800003440},
isbn={978-989-758-593-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the International Conference on Big Data Economy and Digital Management - Volume 1: BDEDM,
TI - Impact of BOPS and ES on Demand and Profitability: Theoretical Models and Simulation Analysis
SN - 978-989-758-593-7
AU - Liu J.
AU - Sun H.
PY - 2022
SP - 947
EP - 955
DO - 10.5220/0011359800003440