Buy Online And Pick Up In Store Research Articles

Pricing, channel design, and platform operations with buy-online-and-pick-up-in-store in online food delivery market

Omnichannel selling has gradually become popular in recent years, and the booming online food delivery (OFD) industry is no exception. Buy online and pick up in-store (BOPS) is regarded as the most important omnichannel fulfilment strategy. In this paper, we establish a stylised model to analyse the effects of BOPS on customer purchases and merchant profitability in the OFD market. We also examine merchants’ pricing and channel design strategies and the operational management of OFD platforms. We consider two merchant segments: online-only merchants who sell products only online and omni-merchants who sell products both online and offline. Interestingly, we find that BOPS helps online-only merchants expand market coverage, but does not necessarily increase omni-merchants’ sales depending on the delivery time and delivery service fee. Furthermore, online-only merchants should always implement BOPS, while omni-merchants should be more cautious about implementing BOPS because it may hurt their profits. In addition, the OFD platform charges a higher delivery service fee under certain conditions to react to merchants’ strategic adoption of BOPS. Finally, the adoption of BOPS may benefit merchants, customers, and platforms simultaneously. Therefore, BOPS may alleviate the contradictions among players in the OFD market.

Inventory Control for Omnichannel Retailing Between One Warehouse and Multiple Stores

In this article, we research a multiperiod two-echelon inventory control problem for omnichannel retailing [i.e., online channel, offline channel, and buy-online-and-pick-up-in-store (BOPS) channel]. Especially, we jointly consider the limited storage capacity of the stores and the delivery lead time of the warehouse. For the out of stock, the unsatisfied demands for multiple purchasing channels have different processes (i.e., lost sales or backlog), based on the different characteristics of multiple channels. First, we divide the multiperiod inventory control problem for omnichannel retailing into two subproblems (the inventory control problem for the stores and the inventory control problem for the warehouse). Then, to reduce the scale of the first subproblem and the computation effort, we propose a method based on Lagrangian relaxation and value iteration to solve the inventory control problem of stores. Further, based on the results of the inventory control problem of stores, we construct a delay-aware Markov decision process (DAMDP) for the inventory control problem of the warehouse and employ the <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">Q</i> -learning technique based on the constructed DAMDP to solve the second subproblem. Besides, we also extend our analysis to the case of the low-level backlog in buying-online channels (i.e., online and BOPS channels). Finally, some numerical experiments are conducted to illustrate the performance of the inventory control policy for omnichannel retailing and reveal some managerial insights.

The value of psychological ownership: how buy-online-and-pick-up-in-store enhances consumer loyalty

PurposeAlthough buy-online-and-pick-up-in-store (BOPS) has been widely implemented by companies, scant attention has been paid to its effect on consumer experience and the concomitant outcomes. Using the psychological ownership theory, this study aims to examine whether and how the BOPS experience (vs online experience) can enhance consumer loyalty.Design/methodology/approachStudy 1 investigated the consumer loyalty of shopping experience (self-pickup vs delivery) on actual consumer behavior through secondary data. Studies 2, 3 and 4 were controlled experiments to further investigate the mediating effect of product psychological ownership, and the moderating effects of product type and postdecision experience valence.FindingsThe authors found that BOPS shopping led to higher consumer loyalty (i.e. repeat purchase and repeat purchase frequency) compared with online shopping. Furthermore, the authors examined that this effect was mediated by product psychological ownership and moderated by product type and postdecision experience valence.Research limitations/implicationsTheoretical speculations about how BOPS shopping affects consumer experience should be probed in future research.Practical implicationsRetailers with physical stores can offer in-store pickup options for their online consumers to increase their product psychological ownership and consumer loyalty. And the positive effects of the BOPS strategy relied on product type and postdecision experience valence.Originality/valueThis research offers theoretical contributions to research on the BOPS strategy, psychological ownership theory and consumer loyalty.

Omnichannel integration strategy based on BOPS.

Technological innovation and the upgrading of consumer preferences have greatly accelerated the rapid development of the "new retail" omnichannel model. Meeting the personalized and seamless interactive experience expected by consumers requires integrating the advantages of both offline and online channels and expanding the integrated and intelligent omnichannel layout. This has emerged as a complex problem that the industry urgently needs to address. In order to tackle this issue, we conducted a study on a Buy-Online-and-Pick-up-in-Store (BOPS) pricing game between offline stores and e-commerce departments, considering factors such as match probability and network cost of return. Furthermore, we proposed the Buy-Online-and-Pick-up-in-Store-and-Return-Online (BORO) strategy and conducted an analysis on the variation in market share and revenue levels for both offline stores and e-commerce departments under this strategy. The results demonstrate that: (i) the omnichannel strategy of BOPS can increase the revenues of both offline stores and e-commerce departments only when the distance costs are moderate; (ii) the BORO strategy provides greater benefits to offline stores compared to e-commerce departments; and (iii) the effectiveness of the BORO strategy is influenced by factors such as match probability, distance cost, and product return. This research not only provides a theoretical foundation but also practical insights for the strategic channel management of omnichannel brand merchants.

Robust pricing and inventory strategies for an omnichannel retailer under carbon tax and cap-and-offset regulations

While an increasing number of retailers use the buy-online-and-pick-up-in-store (BOPS) service to improve operational efficiency, it increases the uncertainty between the offline and online channels. Furthermore, the implementation of different carbon regulations creates certain challenges for an omnichannel retailing system because of the tradeoff between the economy and the environment. These factors motivate us to study the joint pricing and inventory decisions of an omnichannel retailer regrading the stochastic demand of BOPS customers with limited information under carbon tax and cap-and-offset regulations. A distributionally robust newsvendor model is developed for the omnichannel retailer under carbon tax regulation to derive the joint decisions on the sales price and inventory. An interesting result indicates that under carbon tax regulation, differential pricing strategy increases the profit of the omnichannel retailer. The distributionally robust newsvendor model under cap-and-offset regulation is solved by the Karush-Kuhn–Tucker (KKT) conditions. The comparison shows that adopting uniform pricing strategy under cap-and-offset regulation brings more profits than adopting it under carbon tax regulation. Finally, a numerical study is conducted to illustrate and complement the theoretical results. The value of addition demand information is also tested. Key findings show that the omnichannel retailer gains higher profit and emits more carbon emissions under cap-and-offset regulation than under carbon tax regulation. Under each type of regulation, the performance of robust solutions is close to that with normal distribution.

Centralized Decision Making in an Omnichannel Supply Chain with Stochastic Demand

With retailers increasingly adopting the omnichannel retailing model as a core strategy in their daily operations, this study investigates the impact of random demand on the omnichannel supply chain that employs a combination of the online channel, retail channel, and buy online and pick up in store (BOPS) channel, in light of the more stochastic market after the occurrence of COVID-19. To enhance the sustainable profitability of the omnichannel supply chain, this study considers price and lead time dependent demand with both known and unknown distributions, and establishes mathematical models to maximize profit under centralized situations. The study analyzes the variations in demand with lead time in the three channels and examines the effects of price and lead time on profit. Additionally, it investigates the interactions between price and lead time. Through numerical examples, the study illustrates the effects of the mean and variance of random demand on decision variables and examines the influence of potential demand and the sensitivity of lead time. Overall, this analysis provides valuable insights into the impact of demand randomness on the profitability of an omnichannel supply chain, highlighting the importance of considering price and lead time in the decision-making process.

Dual-channel retailing strategy vs. omni-channel buy-online-and-pick-up-in-store behaviors with reference freshness effect

When the freshness of the firm's food is not observable, consumers may experience psychological feelings of elation or disappointment when the perceived actual freshness exceeds or falls short of their initial expectations. This paper investigates the firm's optimal selling strategies considering the consumer reference freshness effect in a fresh food supply chain. We consider two selling modes: the dual-channel retailing strategy (DCRS) mode in which the retailer sells food to consumers from store and online, and the omni-channel buy-online-and-pick-up-in-store (BOPS) mode in which the retailer additionally provides the BOPS option to consumers. Furthermore, the case of two competing suppliers is also considered. We show that on the one hand, the reference effect positively affects price strategies at a low reference freshness, and negatively affects goodwill and freshness-keeping effort in both the DCRS and BOPS modes. The BOPS mode helps to mitigate the negative effects and improve them. On the other hand, the differences found between the two modes indicate that BOPS mode is not always better than DCRS mode. Prices are higher in BOPS mode than in DCRS mode at a high reference freshness, otherwise the prices in DCRS mode are higher at a low reference freshness and with large BOPS channel size. Although BOPS mode helps to alleviate the anchoring effect, it creates higher requirements in terms of the firm's freshness-keeping efforts. If consumer perceptions of freshness as high/low are only dependent on a high/low goodwill, then the firm's profit in DCRS mode is more likely to be higher than in BOPS mode.

Effects of BOPS implementation under market competition and decision timing in omnichannel retailing

One of the most significant fulfillment paradigms is the buy online and pick-up-in-store (BOPS) in omnichannel retailing. However, BOPS incurs many new operational challenges in the presence of competition, like competitive intensity and decision-making timing. To mitigate these problems, a multi-stage, non-cooperative duopoly game is constructed to investigate the competitive implications of introducing a BOPS strategy. First, we consider the situation when competing retailers simultaneously make BOPS decisions. Our results examine how heterogeneous customers choose optimal purchase decisions to maximize their utility and identify the mechanisms of three major effects (i.e., channel migration effect, price self-compensation effect, and limited market share effect). Meanwhile, we analyze when the intensity of competition is strong, intermediate, and weak respectively, the equilibrium strategy of different-type retailers is determined by which configuration. After that, with consideration of total consumer surplus, we shed light on how competing retailers obtain win–win configurations, i.e., both competing retailers and customers are better off, after deploying the BOPS. Subsequently, the investigation extends to broader cases with sequential decisions. Contrary to the common view that second-mover superiority, there exists first-mover superiority in deploying the BOPS. Finally, numerical examples are provided to analyze the impact of cross-selling benefits, fixed cost of BOPS, heterogeneous customer behavior, BOPS convenience, operation cost and competitive intensity on the optimal profit. Our finding was compared with previous studies to provide a novel way to design the BOPS for responding to competitors to maximize customer-oriented profits.

Digital Coupon Promotion and Inventory Strategies of Omnichannel Brands

This paper investigates when an omnichannel brand should offer digital coupons in the online and buy-online-and-pick-up-in-store (BOPS) channels and, if so, the joint decision of coupon face value and store inventory. The impact of a digital coupon promotion on store inventory is also explored. Two scenarios are considered, one where consumers’ costs in the online and store channels are homogeneous and another in which they are heterogeneous, and two newsvendor models, with and without a coupon promotion, are constructed under each scenario. The results show that the issuance of coupons improves the omnichannel brand’s profit when the price is high and the coefficient of the difference in valuation between two types of consumers is low in the homogeneous scenario. In the heterogeneous scenario, the brand prefers the coupon promotion when the price is high or moderate and the coefficient of the difference in valuation between two types of consumers is high. In addition, offering a coupon promotion yields a higher store inventory in most cases. However, store inventory is decreased in some special cases in the homogeneous scenario. Moreover, an increased hassle cost in the BOPS channel significantly lowers the offline demand and profit increase from a digital coupon promotion. Furthermore, a coupon promotion is more likely to benefit both the brand and consumers as the cross-selling revenue increases. These results provide guidance for omnichannel brands to implement coupon promotions and adjust store inventory with stochastic demand.

Location Optimization of Offline Physical Stores Based on MNL Model under BOPS Omnichannel

With the continuous upgrading of consumer demand and retail modes, more and more retailers are switching to an omnichannel retail mode. In order to study the location problem of offline physical stores of online retail enterprises that plan to implement the BOPS (Buy Online and Pickup in Store) omnichannel retail model, this paper considers consumers’ choice behavior under the omnichannel retail model; uses the MNL (Multinomial Logit) model to depict customers’ choice behavior between the online channel, BOPS channel, and offline physical channel; and constructs a location optimization model of offline physical stores with the goal of minimizing the enterprise’s cost. According to the characteristics of the model, an improved genetic algorithm was designed; the algorithm was improved on chromosome selection mode, crossover, and mutation rules. Finally, an example is calculated, and the physical store location scheme of a retail enterprise and the vehicle routing optimization scheme under the two-level distribution network are obtained, which verifies the effectiveness of the model and algorithm and provides a scientific reference for the physical store location decision of online retail enterprises planning to implement the BOPS omnichannel retail model. The impact of freight, return rate, and service level of physical stores on the location of offline physical stores is analyzed. The results show that in the process of expanding offline physical stores to implement the BOPS omnichannel retail model, online retail enterprises can reduce enterprise costs by improving the freight level and service level of the physical store. The higher the return rate of the online channel, the more necessary it is to expand offline physical stores, and the lower the enterprise cost. At the same time, management suggestions are put forward for the enterprise operation under the BOPS omnichannel retail mode.

Revenue sharing or not? Coordination of the buy‐online‐and‐pickup‐in‐store supply chain

AbstractWhile there is much research on coordinating the dual‐channel supply chain using the revenue‐sharing contract, it is unclear if there is a better mechanism design in the buy‐online‐and‐pickup‐in‐store (BOPS) mode. In this channel integration environment, the customer service provided by the bricks‐and‐mortar store is critical to the chain's success. Based on a stackable game model, we analyze the contract methods for the cases of revenue sharing and no revenue sharing, where the latter is classified into two types: All the credit goes to the offline or online channel. Focusing on improving consumer service and supply chain performance in the BOPS mode, we observe that revenue sharing is not necessarily the best contract type, while the non‐revenue‐sharing contract of a lump‐sum subsidy plus quantity discount can coordinate the supply chain. We also analyze the impacts of some endogenous parameters and derive the conditions for the equilibrium outcomes. We find that revenue sharing cannot effectively stimulate the offline channel to improve its service effort as the offline channel is more concerned about service cost sharing than revenue sharing. The results are similar to those of revenue allocation to the online or offline channel in the BOPS mode, but the conditions are slightly different. Conducting numerical studies to gain insights from the analytical findings, we find that the subsidy contract is better than the revenue‐sharing approach under various market conditions.

Benefit from a high store visiting cost in an omnichannel with BOPS

Omnichannel sales surge in the coronavirus pandemic. This paper establishes an analytical model to study when a firm can benefit from implementing the omnichannel strategy of buy-online and pick-up in-store (BOPS), where the market characteristics are captured by the two-dimensional heterogeneity of product valuation and online waiting cost. The increase in the store visiting cost will reduce BOPS consumers’ willingness to pay, but it will also strengthen the encroachment of BOPS on traditional dual-channel. The results show that the firm can benefit from the BOPS strategy when the store visiting cost is relatively high. This well explains the rapid development of the omnichannel with BOPS because of a high store visiting cost during COVID-19. Furthermore, sharply contrasting to the traditional dual-channel sales in which a higher store visiting cost always hurts the firm, the profit under BOPS can be nonmonotonic in the store visiting cost and the firm can benefit from a higher store visiting cost. Specifically, the combination of cross-selling effect, BOPS encroachment effect and BOPS expansion reduction effect associated with the store visiting cost can result in a U-shaped or inverse U-shaped BOPS profit. In addition, introducing BOPS motivates the firm to either increase or decrease the optimal price, conditional on the store visiting cost. For consumers, online and offline consumers can also indirectly benefit from the BOPS strategy, though they may not enjoy the BOPS service.

Store density in omnichannel implementation while considering the environmental impact of packaging materials

A staggering amount of packaging materials consumption in e-commerce has become a significant threat to the environment. The option of ordering online and fulfillment by offline stores significantly decreases the use of packaging materials. The aim of this paper is to introduce an analytical model to support the decision of an omnichannel strategy implementation while simultaneously optimizing the offline stores' density, pricing strategy, and environmental impact of packaging materials. Two omnichannel models are compared, the Buy-Online-and-Pick-Up in-Store (BOPS) mode and a combination of the BOPS mode plus a Ship-From-Store (SFS) mode (BOPS + SFS). The BOPS and BOPS + SFS modes consider an inconvenience cost for consumers who decide to pick up their product at the offline store. The consumers' inconvenience cost is a function of the distance to the offline stores, which suggests that a greater stores' density results in a lower inconvenience cost. The proposed analytical model shows that both the BOPS and the BOPS + SFS modes support a reduction of the environmental impact of packaging materials when compared with the online-only mode. Moreover, there is an optimal offline stores' density that maximizes profits while reducing packaging materials. The density of offline stores is a strategic planning decision to balance operating costs and consumer inconvenience costs. The fulfillment of online orders through physical stores is an encouraging strategy to solve the problem of over-packaging and improves the customer's experience through fast and convenient order pickup; furthermore, it is aligned with the interests of environmentally aware customers. The research findings can guide decision makers when analyzing an omnichannel implementation or searching for improvement opportunities in sustainable e-commerce.

Do customers always adopt buy-online-and-pick-up-in-store service? Consideration of location-based store density in omni-channel retailing

An increasing number of retailers and researchers regard buy-online-and-pick-up-in-store (BOPS) as an important strategy of omni-channel operation. Although many studies focus on the implementation results of the BOPS mode, few explore the antecedent variables that shape its effects. By analyzing 420,020 online transactions (including 33,546 BOPS orders) generated by 110,909 customers via an omni-channel retailer, we empirically examine the impact of retailers' store density at different distances from customers' locations on BOPS adoption behavior. User characteristics, including channel preference and online purchase experience are considered as boundary conditions in this study. We control for relevant factors, conduct several additional analyses, and perform various robustness checks to validate the consistency of our results. Our research shows the significant positive effects of retailers' store density in medium distances on customers' BOPS adoption. However, retailers' store density at short-distance has a negative influence on customers' BOPS adoption. We also find that channel preference and online purchase experience show different moderating effects in the influence of retailers' store density at two difference distances on customers’ BOPS adoption. Our findings generate important theoretical and managerial implications, and suggestions for future research are discussed in detail.

Omnichannel retailing with different order fulfillment and return options

The omnichannel strategies buy-online-and-return-in-store (BORS) and buy-online-and-pick-up-in-store (BOPS) have attracted attention from both industry and academia. In practice, major retailers adopt BORS and BOPS both individually and jointly, which motivates us to explore when it is profitable for a retailer to adopt BORS or/and BOPS strategy. We formulate a stylised model that captures (1) consumers' uncertainty about product match, (2) the offline search cost for consumers, and (3) the cross-selling effect of the consumers' store visit. We find that the cross-selling benefit and the offline search cost have a significant impact on the retailer's optimal omnichannel strategy. When the cross-selling benefit is sufficiently low, adopting BORS alone is optimal for the retailer. When the cross-selling benefit is moderate and the offline search cost is high, adopting both strategies has a complementary effect, and it is optimal for the retailer to adopt both omnichannel strategies jointly. However, when the cross-selling benefit is sufficiently high, adopting both strategies could be less profitable to the retailer than adopting the BOPS strategy alone. Moreover, consumer surplus may decrease in this case, suggesting that adopting both omnichannel strategies could result in a lose-lose situation for both the retailer and the consumers.

Pricing and Contract Coordination of BOPS Supply Chain Considering Product Return Risk

This study proposes a BOPS (buy online and pick up in store) model for a two-echelon supply chain, considering the product return risk to reach an equilibrium result of two omni-channel integration modes, managed by the manufacturer or the retailer, respectively. Furthermore, this study analyzes the impacts of the service cost coefficient and the consumer loyalty of the offline channel on the optimal price, service decision, and profit of different integration modes. This study also compares the profits of enterprises under centralized and decentralized decisions. The results show that centralized decision making can improve the service level of the SA (Store Assistance) effort and the sustainable performance of the supply chain. Whether the BOPS channel is managed by the manufacturer or retailer, the service cost, the product return rate, and the offline channel consumer loyalty have an impact on the decision of product sale price, wholesale price, and SA effort service level. Offline customer loyalty is less sensitive in the BOPS channel managed by the retailer than that managed by the manufacturer. It is suitable for the manufacturer to manage the BOPS channel when offline customer loyalty is low. Otherwise, it is appropriate for the retailer to manage the BOPS channel. The profit of the supply chain under the decentralized decision is less than that under the centralized decision. When executing a wholesale price contract, different omni-channel integration modes can alleviate the double marginalization effect. It can fully coordinate the supply chain members, motivate retailers to improve the service level of the SA effort, and realize Pareto improvement to support supply chain sustainability.

Consumer's usage of logistics technologies: Integration of habit into the unified theory of acceptance and use of technology

Different logistics technologies are emerging to improve the delivery efficiency and service standard of last-mile logistics. This study aims to understand consumer's usage behaviour of logistics technologies focussing on three representative logistics technologies: buy-online-and-pickup-in-store (BOPS), smart locker and drone delivery. A theoretical model is proposed by integrating the factors of habit and attitude into the unified theory of acceptance and use of technology (UTAUT). A total of 450 valid questionnaires are collected, and the data are analysed using structural equation modelling. The results suggest that (1) rational factors (i.e. performance expectancy, effort expectancy, facilitating conditions and attitude) and irrational factor (habit) collectively determine consumers' usage of logistics technologies; and (2) the key driving factors of consumers' usage behaviour of three logistics technologies do vary. The findings enrich the theoretical research on last-mile logistics and provide managerial implications for retail and logistics service providers.

Optimal service decisions in an omni-channel with buy-online-and-pick-up-in-store

Omni-channel retailing has emerged as a major trend in e-commerce. The strategy of buy-online-and-pick-up-in-store (BOPS) has been applied in a variety of contexts. Customers make optimal purchasing decisions depending on the services provided by purchasing channels. Several studies have applied theoretical framework to analyze the effect of BOPS on omni-channel operations; however, they rarely considered the impact of BOPS on channel services. To fill the gap, in this study, we propose an analytical model consisting of a manufacturer with an online channel and an independent retailer. We examine the optimal service decisions in an omni-channel with BOPS and analyze the interaction between the service decisions and the BOPS strategy. Our analysis shows that BOPS attracts both existing and potential customers, whereas all channels will reduce their service levels after introducing BOPS when the cost of increasing online service levels is high. Further, we find that BOPS should be introduced when the service levels of all channels are low, and it may not be suitable for the case in which all channels’ service levels are high. While the adoption of BOPS is beneficial to the retailer, it will be disadvantageous for the manufacturer. Given that the total profit of members will increase after BOPS is introduced in some cases, we design a two-part traffic contract to ensure a win-win situation for all participants.

Effect of the buy‐online‐and‐pickup‐in‐store option on pricing and ordering decisions during online shopping carnivals

AbstractThis study focuses on the value of the buy‐online‐and‐pickup‐in‐store (BOPS) option during online shopping carnivals. We develop a newsvendor model in which a retailer faces the risk of online order overload and provides consumers with a BOPS option. The optimal pricing and ordering decisions under the benchmark scenario and the omnichannel retailing scenario with the BOPS option are analyzed. The results demonstrate that after implementing the BOPS option, the retailer will maintain or lower the price instead of raising the price. In addition, we find that the fraction of BOPS consumers, the unit goodwill loss, and the retailer's best online service capacity play significant roles in the implementation of the BOPS option. We identify the condition under which the retailer can benefit from the BOPS option.

Implications of Buy-Online-and-Pick-up-in-Store (BOPS) for End-to-end Supply Chain Strategy

Implications of Buy-Online-and-Pick-up-in-Store (BOPS) for End-to-end Supply Chain Strategy