Operation Decision Optimization Of Omnichannel BOPS For Brand Retailers

With the increase in omnichannel retailing,more and more retailers are beginning to offer customers omnichannel shopping BOPS(Buy Online and Pickup in Store),such as Walmart,Best Buy,Uniqlo,and Target.In the BOPS mode,orders are generated online and transactions are realized in physical stores.Therefore,BOPS channel has the advantages of placing orders conveniently under the online channel and instant pick-up,experience when picking up,increase customer traffic and purchase amount under the physical store channel,but also has the disadvantages of high return rate under the online channel and inconvenience to the store under the physical channel.According to the characteristics of the BOPS channel,research and draw relevant conclusions from the following four aspects:Firstly,considering the channel return and return loss,analyzing the impact of the omnichannel BOPS mode on the market demand and profitability of the brand retailer under the same price and the same price situation,and the profitable conditions for the retailer to open the BOPS channel is the first issue to study the omnichannel BOPS operating mode.The results show that when a certain relationship is satisfied between the online return rate and the BOPS channel’s inconvenience,the opening of BOPS channel will increase total demand,reduce demand of the online channel and store channel,and the reduced demand will be transferred to the BOPS channel,while the total profit will increase when the online return rate or BOPS channel’s inconvenience or return loss reaches a certain threshold,and this threshold is the profitable condition for the retailer to open the BOPS channel.Secondly,online consumers often have higher return rates due to lack of experience or lag in experience,the retailer can increase customer experience by increasing the level of experience services,but it will also generate certain operating costs.Therefore,research on joint optimization decisions for omnichannel BOPS pricing and experience service to balance operating cost and maximize retailer’s profit when considering online return and channel costs is one of the important contents of the retailer’s omnichannel BOPS operation decision optimization.The results show that when the BOPS channel is convenient for shopping or the BOPS channel is not convenient but the online return rate is low,brand retailer’s optimal pricing and service decision is to increase the product sales price while reducing the investment in experience services.Thirdly,due to the large inventory backlog often generated by the sufficient stock of the retailer before the sales season,especially the large shopping festivals and the high return rate after the large shopping festivals,and different purchase ratios in different channels will also affect inventory level.Considering online return and the ratios of channel selection,research on joint optimization decisions for omnichannel BOPS ordering and pricing is also an important part of the brand retailer’s omnichannel BOPS operation decision optimization.The results show that under certain conditions,the retailer has joint decisions on optimal pricing and optimal ordering before and after opening BOPS channel,and the opening of BOPS channel helps to slightly increase the optimal sales price,significantly increase the optimal order quantity and maximum profit.The consumer selection ratio of store channel has a large positive impact on optimal pricing and optimal ordering decisions and maximum profit;the consumer channel selection ratio and the online return rate have no significant impact on the optimal sales price;and the maximum psychological valuation of consumers’ purchases of products has a greater positive impact on optimal pricing.Finally,in response to the uncertainty of market demand and the real problem of high online return rate,a more systematic and comprehensive research on joint optimization decisions for omnichannel BOPS pricing,experience service and order cycle is particularly important for the brand retailer’s omnichannel BOPS operation management and practice.The results show that when the demand of unit time reaches a certain scale,and the customer’s price sensitivity,unit inventory cost and online return rate do not exceed specific values,it is profitable for the retailer to open BOPS channel,and the maximum profit can be increased significantly;when the demand scale of unit time reaches a certain value and the online return rate is low,the retailer should lower the sales price and experience service efforts and shorten the order cycle to maximize their profits;when unit inventory cost and customer’s price sensitivity are low,the retailer should lower product pricing,increase experience service efforts,and shorten order cycles to maximize their profitsCompared with existing research,the innovative contributions and content of this article are mainly reflected in the following four aspects:(1)According to the fact that online return rate is high and omnichannel BOPS can increase the convenience of return and reduce the loss return for buyers and sellers,we analyze the impact of omnichannel BOPS on brand retailer’s market demand and profitability when considering return and return losses,and propose profitable conditions for opening BOPS channel to provide a reference for the brand retailer’s channel decisions.(2)In view of the ubiquitous customer experience and the high online return rate,based on consumer utility functions under online channel,store channel,and BOPS channel when considering the online return and channel costs,we build pricing and service joint decision models for the brand retailer before and after opening BOPS channel,so as to balance the experience service operating costs with reasonable pricing and service levels,and maximize retailer profits.(3)In response to the large inventory backlog caused by the sufficient stock of retailers before the large shopping festival and the high online return rate after the festival,we study the joint decision of omnichannel BOPS pricing and ordering so that the brand retailer can adjust market demand through reasonable product price and order quantity,reduce inventory backlog,and then improve revenue.(4)Based on the inventory level affected by the market demand rate and the online return rate,we systematically study the joint optimization decision of omnichannel BOPS pricing,service effort and order cycle,so that the retailer can reduce sales losses and inventory pressure through reasonable pricing,service and order cycles,and improve the omnichannel retailer’s overall revenue.In summary,this research systematically explains the characteristics of the omnichannel BOPS mode,breaks through the retailer’s omnichannel BOPS operation management scope,and enriches the connotation of omnichannel BOPS operation decision optimization,and provides theoretical basis and decision reference for enterprises to implement BOPS omnichannel strategy in the new retail era and realize seamless integration of online and offline omnichannel operations,which has more important practical significance for improving the benefits of the omnichannel BOPS brand retailer.