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Optimizing the location of physical shopping centers under the clicks-and-mortar retail mode

Author

Listed:
  • Yu Sun

    (Ningbo University)

  • Feng Lian

    (Ningbo University)

  • Zhong-Zhen Yang

    (Ningbo University)

Abstract

To compete with online e-commerce, traditional retailing is implementing a new retail mode that combines online sales with physical stores, which may change the channel, transport mode and logistics cost of retail commodities from manufacturers to end consumers. In this context, it is necessary for physical retailers to relocate their shopping centers in order to maximize profits. This paper develops a location optimization model for physical shopping centers based on consumer shopping choices (platform choices and store choices), carbon tax policy and the economic scale of transport under the new retail mode. This model is applied to optimize the number and scale of physical shopping centers and corresponding locations with the objective of maximizing the retail profit under the new retail mode. The results show that under the new retail mode, the number of shopping centers, the scale of an individual physical store and the total retail logistics cost decrease, while the retail profit increases. This work lays a theoretical basis for retailers to build online and offline retail systems and rationally determines the spatial distribution of shopping centers in a city.

Suggested Citation

  • Yu Sun & Feng Lian & Zhong-Zhen Yang, 2022. "Optimizing the location of physical shopping centers under the clicks-and-mortar retail mode," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(2), pages 2288-2314, February.
    • Handle: RePEc:spr:endesu:v:24:y:2022:i:2:d:10.1007_s10668-021-01534-6
    DOI: 10.1007/s10668-021-01534-6
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    References listed on IDEAS

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