Optimal buy-online-and-pick-up-in-store strategies in the livestreaming selling context

Abstract

To enhance online consumers' experience, retailers have adopted a series of measures, such as offering Buy-Online-and-Pick-up-in-Store (BOPS) to reduce waiting time for delivery and opening livestreaming channels to enhance shopping entertainment. In practice, most retailers only provide BOPS services for traditional online channels or do not provide BOPS services. However, a few retailers offer BOPS services on both channels. Reasons for cross-channel BOPS strategy heterogeneity remain unclear. This paper develops an analytical model to study a retailer's optimal BOPS strategies and corresponding pricing decisions for different channels. The results indicate that when consumers' hassle costs of purchasing through livestreaming are moderate, dual-channel BOPS is optimal if operating costs are low; otherwise, offering no BOPS becomes the optimal strategy. However, under high livestreaming hassle costs, the retailer should provide BOPS exclusively for the traditional online channel, as consumers would not purchase through the livestreaming channel under the other two BOPS strategies. Furthermore, we extend our model to explore optimal BOPS strategies for a retailer with offline sales. The conclusions provide valuable decision-making guidance for retailers implementing BOPS in livestreaming selling contexts.