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Digital showroom strategies for dual-channel supply chains in the presence of consumer webrooming behavior

Author

Listed:
  • Yanhong Sun

    (Shanghai University)

  • Zihan Wang

    (Shanghai University)

  • Shuai Yan

    (Shanghai University)

  • Xiaohua Han

    (Guangdong University of Foreign Studies)

Abstract

Online sellers are increasingly adopting the digital showroom service to reduce consumer valuation uncertainty and boost sales. However, such service also facilitates consumer webrooming behavior, which may reduce the online demand and intensify channel competition. In this study, we develop a theoretical supply chain model consisting of a manufacturer and a retailer to investigate the optimal digital showroom strategy for dual-channel supply chains in the presence of consumer webrooming behavior. The findings show that when the online shopping cost is relatively high, the digital showroom service can increase the profits of both players under two typical supply chain structures. However, when the online shopping cost is relatively low, the digital showroom service may decrease each player’s profit since it increases the selling prices in both channels and aggravates the double marginalization problem under the wholesale price contract. In this case, a new contract that combines a quantity discount component and a webrooming profit sharing component (abbreviated as QD-WPS) is proposed, which can perfectly coordinate the dual-channel supply chain with digital showrooms.

Suggested Citation

  • Yanhong Sun & Zihan Wang & Shuai Yan & Xiaohua Han, 2023. "Digital showroom strategies for dual-channel supply chains in the presence of consumer webrooming behavior," Annals of Operations Research, Springer, vol. 329(1), pages 1109-1148, October.
    • Handle: RePEc:spr:annopr:v:329:y:2023:i:1:d:10.1007_s10479-021-04475-5
    DOI: 10.1007/s10479-021-04475-5
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