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Impact of artificial intelligence adoption on online returns policies

Author

Listed:
  • Guangyong Yang

    (Xiamen University)

  • Guojun Ji

    (Xiamen University)

  • Kim Hua Tan

    (Nottingham University Business School)

Abstract

The shift to e-commerce has led to an astonishing increase in online sales for retailers. However, the number of returns made on online purchases is also increasing and have a profound impact on retailers’ operations and profit. Hence, retailers need to balance between minimizing and allowing product returns. This study examines an offline showroom versus an artificial intelligence (AI) online virtual-reality webroom and how the settings affect customers’ purchase and retailers’ return decisions. A case study is used to illustrate the AI application. Our results show that adopting artificial intelligence helps sellers to make better returns policies, maximize reselling returns, and reduce the risks of leftovers and shortages. Our findings unlock the potential of artificial intelligence applications in retail operations and should interest practitioners and researchers in online retailing, especially those concerned with online returns policies and the consumer personalized service experience.

Suggested Citation

  • Guangyong Yang & Guojun Ji & Kim Hua Tan, 2022. "Impact of artificial intelligence adoption on online returns policies," Annals of Operations Research, Springer, vol. 308(1), pages 703-726, January.
    • Handle: RePEc:spr:annopr:v:308:y:2022:i:1:d:10.1007_s10479-020-03602-y
    DOI: 10.1007/s10479-020-03602-y
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    References listed on IDEAS

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