A Research on Omni-channel Service Area and Pricing Optimization under Consumers' Strategic Behavior

Omni-channel retail brings not only more business opportunities to retailers, but also challenges to the operation of Omni-channel retailers. In order to study the impact of consumer strategic buying behavior on the Omni-channel BOPS (Buy-online-and-pick-up-in-store) operating service area and pricing. The operation mode of BOPS for Omni-channel retailers is modeled, and the optimal pricing and service area of Omni-channel retailers obtained by using the optimization theory (K-T condition). A numerical analysis further proves that consumer strategic buying behavior is an important factor that Omni-channel retailers should consider when formulating the BOPS operational service area and pricing strategy. The research results show that consumers who are far away from Omni-channel retailers need channel retailers to consider their customer strategic behavior and strive for more customers with customer strategic behavior to serve the store; and for consumers nearby, Omni-channel retailers do not need consider their behavior to reduce the channel operating costs of Omni-channel retailers. In addition, the determination of the optimal service area can enable retailers to provide better services to consumers with less channel cost and reduce their operational decision errors.