Consumer Inter-Product Showrooming and Information Service Provision in an Omni-Channel Supply Chain

Tao Zhang, Gang Li, T. C.Edwin Cheng, Stephen Shum

Research output: Journal article publicationJournal articleAcademic researchpeer-review

5 Citations (Scopus)

Abstract

Facilitated by physical showrooms, many online first retailers have embarked on the practice of omni-channel retailing. This offline to online mode (information delivery offline and product fulfillment online) empowers consumers’ showrooming behavior in two ways, namely, intra-product showrooming (intra-SR) and inter-product showrooming (inter-SR). As the physical showroom usually displays a partial assortment of the online products, consumer inter-SR, i.e., the behavior of inspecting one product offline but buying a different or related product online, is critical to firms’ decisions. Moreover, inter-SR facilitated by the retailer's omni-channel operations changes the nature of upstream competition between manufacturers. In this article, we develop a theoretical model to investigate consumer inter-SR behavior and the information service provision in an omni-channel supply chain. Our main findings are as follows. First, consumer inter-SR benefits the manufacturer whose product is displayed online exclusively but hurts the manufacturer whose product is dual-channel displayed; inter-SR is beneficial to the omni-channel retailer only when the inter-SR intensity is not too high. Second, under the service compensation contract, the dual-channel manufacturer and the retailer can be coordinated to provide enhanced information service; the online-exclusive manufacturer, however, may be either better off or worse off depending on the relative strengths of the utility-increasing effect and the service-differentiating effect of the information service enhancement. Third, the consumers located far from the showrooms are more likely to be hurt by the inter-SR behavior and the information service compensation, while the local consumers generally benefit from them. Finally, the in-store inventory that facilitates immediate product fulfillment has a positive impact on the retailer's information service provision.

Original languageEnglish
JournalDecision Sciences
DOIs
Publication statusAccepted/In press - 1 Jan 2019

Keywords

  • Information Service
  • Inter-Product Showrooming
  • Omni-channel Retailing
  • Operations-Marketing Interface
  • Supply Chain

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Strategy and Management
  • Information Systems and Management
  • Management of Technology and Innovation

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