Abstract
During COVID-19, public health measures triggered shifts in consumer behavior, disrupting supply chains and challenging physical stores’ viability. To navigate this uncertainty, retailers must adjust their channel strategies. Considering consumer heterogeneity in both retailer and channel preferences, this study examines how two competing brick-and-mortar retailers integrate online channels amidst varying pandemic conditions. Square-Hotelling models indicate that perceived severity and isolation necessity outweigh coupon offerings and delivery charges in integration decisions. As severity rises, asymmetric adoption emerges first, followed by symmetric adoption, and then asymmetric adoption again. Enhanced health knowledge dissemination prolongs the transition process of channel integration equilibria. Retailers should align strategies with perceived pandemic severity and public health measures, ensuring preparedness for channel integration.
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