Omnichannel supply chain operations for luxury products with conspicuous consumers

Abstract

In the context of omnichannel retailing, this paper intends to investigate how conspicuous behavior and concerns of stock availability influence a luxury firm’s operational decisions. Our analytical study indicates that with the firm's different channel strategy---store-only and omnichannel strategy--consumers’ behavior in terms of valuation and channel selection is varied. Furthermore, as compared to the store-only channel, the omnichannel strategy results in a lower price and a lower stock level in the store. The luxury firm may not benefit from it. Our results are robust for both the high-end and the mass luxury products in a variety of settings.