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Return policies and O2O coordination in the e-tailing age

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  • Yan, Ruiliang
  • Pei, Zhi

Abstract

Return policy is a strategic tool widely used by firms to build long-term relationship with their consumers. We develop a novel O2O (online to offline) competition model to address how the competitive return policies can be employed to coordinate the O2O distributions under the manufacturer – traditional retailer supply chain where the manufacturer opens an online channel to compete with the traditional retailer. Our results show that utilizing the revenue sharing plus profit sharing mechanisms, the manufacturer and the traditional retailer can employ different return policies for their respective channels to coordinate the O2O distributions and achieve a Pareto solution for all parties in a manufacturer - traditional retailer supply chain. Particularly when the product is becoming increasingly compatible with online sales, the value of the differential of return policies would further increase for both the manufacturer and the retailer.

Suggested Citation

  • Yan, Ruiliang & Pei, Zhi, 2019. "Return policies and O2O coordination in the e-tailing age," Journal of Retailing and Consumer Services, Elsevier, vol. 50(C), pages 314-321.
    • Handle: RePEc:eee:joreco:v:50:y:2019:i:c:p:314-321
    DOI: 10.1016/j.jretconser.2018.07.006
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    References listed on IDEAS

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    3. Aditya Halim Perdana Kusuma Putra, 2024. "Learning from the Past Bridging Digital and Physical Markets: A Guidelines for Future Research Agenda of Online-to-Offline (O2O) Marketing Strategy," International Review of Management and Marketing, Econjournals, vol. 14(3), pages 82-96, May.
    4. Datta, Alotosh & Sarkar, Biswajit & Dey, Bikash Koli & Sangal, Isha & Yang, Liu & Fan, Shu-Kai S. & Sardar, Suman Kalyan & Thangavelu, Lakshmi, 2024. "The impact of sales effort on a dual-channel dynamical system under a price-sensitive stochastic demand," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    5. He, Peng & He, Yong & Tang, Xiaoying & Ma, Shigui & Xu, Henry, 2022. "Channel encroachment and logistics integration strategies in an e-commerce platform service supply chain," International Journal of Production Economics, Elsevier, vol. 244(C).
    6. Björn Stöcker & Daniel Baier & Benedikt M. Brand, 2021. "New insights in online fashion retail returns from a customers’ perspective and their dynamics," Journal of Business Economics, Springer, vol. 91(8), pages 1149-1187, October.
    7. Al-Adwan, Ahmad Samed & Al-Debei, Mutaz M. & Dwivedi, Yogesh K., 2022. "E-commerce in high uncertainty avoidance cultures: The driving forces of repurchase and word-of-mouth intentions," Technology in Society, Elsevier, vol. 71(C).
    8. Shao, Bingjia & Cheng, Zhendong & Wan, Lijuan & Yue, Jie, 2021. "The impact of cross border E-tailer's return policy on consumer's purchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    9. Zhang, Qiao & Chen, Jing & Chen, Bintong, 2021. "Information strategy in a supply chain under asymmetric customer returns information," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).
    10. Rezaei Kalantary, Mina & Hejazi, Seyed Reza & Khosroshahi, Hossein, 2023. "Pricing for different return policies in an online marketplace considering appeasement during a post-return out-of-stock," International Journal of Production Economics, Elsevier, vol. 266(C).

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