Whether a manufacturer introduces a direct or an indirect online channel in the presence of consumer showrooming behaviour?

ABSTRACT

In multichannel retailing, consumers may experience products in physical stores and eventually purchase online, which is referred to as showrooming behaviour. In this study, we investigate a manufacturer’s online channel strategy in the presence of showrooming behaviour in a supply chain composed of a manufacturer and a physical retailer. Our results exhibit the following major findings. First, adding an online channel regardless of a direct or an indirect online channel (i.e. owned by the manufacturer or an independent online retailer) will not always benefit the manufacturer but introducing a direct online channel will always hurt the physical retailer. Second, when introducing an indirect online channel, the manufacturer will decrease the wholesale price to regulate the effect of showrooming behaviour. Interestingly, if the market size of distant consumers is relatively large, the showrooming behaviour can benefit both the manufacturer and the physical retailer when an indirect online channel is introduced.

KEYWORDS:

• Dual-channel supply chain
• showrooming behaviour
• channel strategy
• pricing decisions

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 www.xinhuanet.com/fortune/2018-06/13/c_129892790_2.htm

2 https://it.sohu.com/20130110/n363018718.shtml

Additional information

Funding

This research was supported by programs granted by the National Natural Science Foundation of China (abbreviated as NSFC) (Nos: 72031004, 72002121 and 71671108).