Research and Simulation of Omni-channel Return Strategies Considering Consumer Channel Preferences  
Author Qianyao Zhang

 
Co-Author(s) Qing Zhang; Qiuying Xiao; Jing Wang

 
Abstract The steady development of e-commerce platforms has brought a huge impact on the traditional brick-and-mortar retail industry. However, since customers cannot touch and try products when making purchases, they may experience psychological disappointment after receiving the products, leading to a relatively high product return rate. Considering the common phenomenon of returns, consumers are more inclined to choose retailers with lenient return policies when purchasing products. Therefore, to optimize return services, retailers have begun to experiment with cross-channel return policies, namely, buy-online-return-in-store (BORS), based on the original channel return policy, to provide consumers with diversified choices. This paper introduces consumers with offline channel preferences, considers both the original channel return policy and the cross-channel return policy, constructs consumer utility function models based on the consumer utility theory, comparatively analyzes the channel selection behavior of consumers without channel preferences, constructs a return penalty decision model, solves for the optimal product pricing of the retailer and the online return penalty cost, and conducts a numerical analysis. The conclusion is that when consumers' satisfaction with the product reaches a moderate level, the retailer's profit is higher under the original channel return policy, and when consumers' satisfaction with the product is low, the retailer's profit is higher under the cross-channel return policy.

 
Keywords Cross-channel management; Return policy; Pricing strategy
   
    Article #:  DSBFI25-87
 
Proceedings of 3rd ISSAT International Conference on Data Science in Business, Finance and Industry
January 6-8, 2025 - Da Nang, Vietnam