Is Buy-online-and-pick-up-in-store Strategy always Advantageous?

This paper studies whether merchants with a dual channel should implement a buy-online-and-pick-up-in-store channel integration. The differential pricing without BOPS and service cooperation with BOPS between manufacturer and retailer are established respectively and the optimal pricing and compensate strategies are derived. In addition, the effects of consumer structure differences, service cost differences of offline retailer, channel competition and cross-selling revenue on pricing and supply chain profit are discussed. Finally, the applicable conditions for the implementation of BOPS are given by numerical simulation. The results show that the increase in cross-selling revenue is always beneficial to the system. Due to channel competition, the strategy of online and offline channel differential price model can be better than BOPS uniform price model under the condition of limited cross-selling revenue. Consumer structure greatly affects the implementation result of BOPS. When more consumers are willing to pick up in store, it is more profitable for the system and its members to implement BOPS.