Coopetition in Omnichannel Operations

88 Pages Posted: 31 May 2023

See all articles by Lin Liu

Lin Liu

Beihang University

Zhenyang Shi

Zhejiang University of Technology

Yi Yang

School of Management, Zhejiang University

Quan Yuan

Zhejiang University

Ziying Zhang

Zhejiang University

Date Written: May 29, 2023

Abstract

Omnichannel strategies may be a creative solution to soften the competition between e-tailers and brick-and-mortar (B&M) retailers. This paper studies the coopetition partnership in omnichannel operations between an e-tailer and multiple B&M retailers under the buy-online-ship-from-store (BOFS) strategy. In this cross-channel partnership, the e-tailer's orders can be fulfilled by B&M retailers with their store inventory, which improves consumers' experiences of last-mile delivery, and retailers earn additional profits through a revenue sharing scheme. We attempt to investigate when the e-tailer and B&M retailers have the incentives to form such a coopetition partnership and when all stakeholders in the market benefit from the BOFS strategy. Our results show that under the coopetition partnership, the profits of the e-tailer and retailers both have an inverted-U shaped relationship with the number of retailers in the market. When there are a few (many) retailers, the entrance of a new retailer may benefit (hurt) both the e-tailer and retailers due to the convenience effect (competition effect) of the coopetition partnership. This creates divergences in firms' willingness to jointly implement the BOFS strategy. We then show that the e-tailer and retailers both want to form the partnership when consumers' hassle cost is low, the market size is large, and the number of retailers is not too large. In addition, all stakeholders, including consumers, the e-tailer, and retailers, may benefit from the coopetition omnichannel partnership with the BOFS strategy (i.e., an “all-win” situation).

Keywords: Coopetition, Omnichannel, BOFS, Retail Operations, Revenue Sharing

Suggested Citation

Liu, Lin and Shi, Zhenyang and Yang, Yi and Yuan, Quan and Zhang, Ziying, Coopetition in Omnichannel Operations (May 29, 2023). Available at SSRN: https://ssrn.com/abstract=4461608 or http://dx.doi.org/10.2139/ssrn.4461608

Lin Liu

Beihang University ( email )

Xueyuan Road, Haidian District
Beijing, 100191
China

Zhenyang Shi (Contact Author)

Zhejiang University of Technology ( email )

Hangzhou, Zhejiang 310024
China

Yi Yang

School of Management, Zhejiang University ( email )

38 Zheda Road
Hangzhou, Zhejiang 310058
China

Quan Yuan

Zhejiang University ( email )

38 Zheda Road
Hangzhou, Zhejiang 310058
China

Ziying Zhang

Zhejiang University ( email )

38 Zheda Road
Hangzhou, Zhejiang 310058
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
106
Abstract Views
328
Rank
470,244
PlumX Metrics