The Choice Of The Borp Strategy For Retailers Under Different Market Competition Environments

As consumers have higher and higher requirements for shopping experience,retailers have begun to integrate online and offline channels to provide consumers with seamless purchasing services.For example,some dual-channel retailers have begun to provide consumers with the BORP service.For online purchases and offline returns.The BORP strategy is a "double-edged sword".The BORP strategy is conducive to expanding the demand for retailer’s online channel.Meanwhile,consumers who chooses crosschannel returns may generate additional purchases in physical stores,which benefits for retailers.And the BORP strategy will increase the volume of consumer returns and generate additional return losses.Therefore,when to adopt BORP strategy is an important decision problem.To solve above problems,we study the choice of BORP strategy for dual-channel retailers in different market competition environments.In the monopoly setting,we construct the models of retailers adopting BORP strategy and not adopting BORP strategy respectively,and explore the conditions and influencing factors of adopting the BORP strategy.In the competitive setting,we use the subgame perfect Nash equilibrium theory to construct a subgame model under different combinations of return strategies of the retailers,and find the equilibrium strategy combination.We find that whether retailers adopt BORP strategy is affected by cross-benefit.Only when the cross-benefit is greater than a certain threshold,retailers can obtain higher profits by adopting BORP.And this threshold is affected by the return rate and the proportion of different consumer types.In general,If the return rate is smaller,the retailers prefer to adopt the BORP strategy;If more consumers want to buy-offline,the retailers don’t want to adopt the BORP strategy;If more consumers want to cross-channel return,the retailers prefer to adopt the BORP strategy.Meantime,after retailers adopting the BORP strategy,their online channel demands will always increase,but equilibrium prices,total demands and offline channel demands may not necessarily increase,but are also affected by cross-benefits.In the competition setting,whether adopt a BORP strategy is not only affected by cross-benefit,but also competition intensity.When the cross-benefit is small,neither of two retailers adopt the BORP strategy;When the cross-benefit is large,if the competition between the two retailers is relatively moderate,both retailers adopt the BORP strategy.Otherwise,only one retailer adopts the BORP strategy;When the cross-benefit is in the middle state,several combination strategies may become equilibrium strategies under different intensity of competition.In the asymmetrical adoption of the BORP strategy,the greater the cross benefit and the more moderate the competition,the retailer who adopts the BORP strategy are more likely gain an advantage in the competition.Especially when the cross benefit is enough to make up for the loss of return,the retailer who adopts the BORP strategy always gets the higher benefit.