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Effect of BOPS implementation for omnichannel retailing with contingent free shipping policy

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  • Li, Ning

Abstract

This paper studies the effect of buy-online-and-pick-up-in-store (BOPS) implementation for an omnichannel retailer providing online and offline channels, where product price and free-shipping threshold are decision variables. Especially, for the online channel, the retailer employs a contingent free shipping (CFS) policy. Based on the different characteristics of purchasing channels, we first construct the utility functions of purchasing channels and then employ the principle of maximum utility to obtain demand functions. Further, we develop optimization problem models with and without BOPS channels to study the effect of BOPS. Then, based on the original problem, we consider two extension models (i.e., the difficulty of finding suitable add-on product and the market competition). Finally, we conduct some numerical experiments to obtain some managerial insights about the BOPS implementation. Our results show that the BOPS implementation can increase the total demand. However, the BOPS channel is beneficial for omnichannel retailers only under the small BOPS hassle cost and the lower BOPS operation cost. Besides, when the CFS policy has less attractiveness to online customers, the BOPS implementation is more beneficial to omnichannel retailers.

Suggested Citation

  • Li, Ning, 2026. "Effect of BOPS implementation for omnichannel retailing with contingent free shipping policy," International Journal of Production Economics, Elsevier, vol. 294(C).
    • Handle: RePEc:eee:proeco:v:294:y:2026:i:c:s0925527326000277
    DOI: 10.1016/j.ijpe.2026.109936
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    References listed on IDEAS

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