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Manufacturer driven strategic coordination as a response to “showrooming”

Basak, S., Basu, P, Avittathur, B., Sikdar, S. (2020) Manufacturer driven strategic coordination as a response to “showrooming”. Decision Support Systems, 133 . ISSN 0167-9236. (doi:10.1016/j.dss.2020.113305) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:92968)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided. (Contact us about this Publication)
Official URL:
http://dx.doi.org/10.1016/j.dss.2020.113305

Abstract

“Showrooming”, a practice where consumers visit a brick-and-mortar store to examine and research a product before buying it online, is being increasingly observed in recent times. This not only adversely affects the physical store but also the manufacturer in the long run. Showrooming leads to reduced sales efforts on the part of the brick-and-mortar retailer which leads to a decline in showcasing of the product to consumers. This affects the overall demand for the product in the market. In this paper, we analyze the effect of wholesale prices set by the manufacturer on the retail prices of the products in a multi-channel environment affected by showrooming. To combat the adverse impact of showrooming, we further investigate the feasibility of a manufacturer-driven alliance with the brick-and-mortar retailer so that it expends adequate sales effort that leads to higher demand and a dedicated consumer base. We derive a three-parameter contract that can coordinate the channel and arrive at a win-win situation for the manufacturer and the brick-and-mortar retailer. Our analysis shows that the contract is more beneficial for a brick-and-mortar retailer with lower relative market potential. Additionally, we find that the contract brings down the retail price of the product which benefits the end consumers. © 2020 Elsevier B.V.

Item Type: Article
DOI/Identification number: 10.1016/j.dss.2020.113305
Uncontrolled keywords: Contract, Game theory, Multi-channel retail, Showrooming, Supply chain management, Commerce, Costs, Manufacture, Mortar, Sales, End consumers, Market potential, Multi-channel environment, Physical stores, Sales effort, Strategic coordination, Three parameters, Whole sale prices, Brick
Subjects: H Social Sciences
Divisions: Divisions > Kent Business School - Division > Department of Analytics, Operations and Systems
Depositing User: Preetam Basu
Date Deposited: 31 Jan 2022 12:10 UTC
Last Modified: 03 Feb 2022 18:47 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/92968 (The current URI for this page, for reference purposes)

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