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Top1. Introduction
As consumers are becoming more sophisticated to optimize their shopping experience, retailers eager to achieve their expected profit targets are driven to enrich their retail channels to attract more consumers. For example, according to Retail Systems Research, by June 2013, 64% of retailers had chosen to retail online and in physical stores (Rosenblum and Kilcourse (2013)). The practice of multi-channel shopping has encouraged consumers to be “omni-channel” in their outlook and behavior. In reality, many mobile retailers, such as Xiaomi, Oppo, Huawei sell their products through two channels. Customers can choose to experience the performance of mobile phones before buying them in physical stores, or they can buy them directly online. In addition, War-Mart, the largest retailer in the world, launches a new service through which the customers can buy products online while pay for them at a nearby store. Hence, omni-channel retailing has been an inevitable trend and a world-wide consensus.
omni-channel retailing means that retailers employ the integration of physical channels, e-commerce channels and mobile e-commerce channels to sell goods or services, and provide customers with diverse purchase experiences to meet their needs. In omni-channel retailing, customers who go shopping in physical store can immediately learn about the price and make final decisions through touching and comparing different goods. By contrast, those who shop online are not able to enjoy the same experience. Therefore, retailers should carefully make pricing strategies based on the consumers’ preference and deliver online and offline information to omni-channel customers.
Stackelberg equilibrium game has important implications in solving optimal solutions and helping make decisions. For a supply chain with the background of Stackelberg game characteristics, each member aims to maximize their own interests and can make their own decisions independently and rationally. For example, Toyota and General Motors are giant manufacturers who dominate the market, and have an effect on decisions of other members. In addition, there are also some gigantic retailers who have key roles and remarkable influence in their field, such as Tesco, Gome and Wal Mart. Actually, both supplier and retailer aim at maximizing their own profit and the total profit of supply chain.
In addition, the reduction of carbon emission has become an inevitable trend in the world. In the past few years, global warming has been a concern to many due to its impact on the environment and human health. Great efforts have been made to reduce the carbon emission. For example, the global climate change summits are held regularly and gradually standardized as a result of the joint efforts of the international community. And some typical carbon policies, such as carbon tax policy, and cap-and-tap system and so on, are widely adopted by many countries. Additionally, in 2018, Dong Minglun, president and CEO of Wal-Mart, announced that Wal-Mart's global “1 billion tons emission reduction project” was officially launched in China, with the goal of reducing its greenhouse gas emissions from the global business value chain by 1 billion tons by 2030. Many other companies, such as Pepsi Cola and Apple, have also launched green supply chain management extensively (Heydari et al. 2018). Actually, consumers’ preference for low carbon products is also one of the important reasons why the low carbon is the focus of attention. In most of the existing literature, manufacturers have made great efforts to reduce carbon emission, but there is little literature on retailers' efforts to reduce carbon emissions. However, we assume that retailers also contribute to reducing carbon emissions, which can be reflected in the retailer's cost function.
In this paper, we focus on the following research questions:
- 1.
Under decentralized and centralized decision instances, what are the optimal retail prices in two channels, and how do they compare?
- 2.
How can optimal decision variables affect the physical store’s profit, online store’s profit and the total profit of the omni-channel in three decision circumstances?
- 3.
How can the customers’ preference and the effort level of emission reduction affect the omni-channel members' decision making and total profit of the retailer?