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Consumers regard product delivery as an important service component that influences their shopping decisions on online retail platforms. Delivering products to customers in a timely and reliable manner enhances customer experience and companies’ profitability. In this research, we explore the extent to which customers value a high-quality delivery experience when shopping online. Our identification strategy exploits a natural experiment: a clash between SF Express and Alibaba, the largest private logistics service provider with the highest reputation in delivery quality in China and the largest online retail platform in China, respectively. The clash resulted in Alibaba unexpectedly removing SF Express as a shipping option from Alibaba’s retail platform for 42 hours in June 2017. Using a difference-in-differences design, we analyze the market performance of 129,448 representative stock-keeping units on Alibaba to quantify the economic value of a high-quality delivery service to sales, product variety, and logistics rating. We find that the removal of the high-quality delivery option from Alibaba’s retail platform reduced sales by 14.56% during the clash, increased the contribution of long-tail to total sales—sales dispersion—by 3%, but did not impact the variety and logistics rating of sold products. Furthermore, we also identify product characteristics that attenuate the value of high-quality logistics and find that the removal of SF Express is more obstructive for (1) star products as compared with long-tail products because the same star products are likely to be supplied by competing retail platforms that customers can easily switch to, (2) expensive products because customers need a reliable delivery service to protect their valuable items from damage or loss, and (3) less-discounted products because customers are more willing to sacrifice the service quality over a price markdown. This paper was accepted by Victor Martínez-de-Albéniz, operations management.

[Display omitted] •Retail platforms can increase product valuation by offering large assortments.•Assortment effects depend on customer assessment orientation as a state or trait.•Effects on valuation are mediated by customer engagement and attitude certainty.•A field study demonstrates 27% increase in product selection likelihood. Popular digital platforms, such as Netflix and GrubHub, purposefully aggregate offerings, according to the premise that customers value products chosen from plentiful assortments. Yet academic literature provides little clarity about when, for whom, or how larger online retail assortments affect the value of the products. To provide new insights, the current article aims to address ambiguous extant findings about the effects of larger product assortments. Specifically, this research tests whether customers with high, as opposed to low, assessment orientation value products more when they have chosen them from larger, as opposed to smaller, assortments. Four experiments affirm this idea, such that customers with a high assessment orientation value products more when they have chosen them from platforms with relatively larger assortments. Sequential mediation of the effect occurs through increased choice engagement and attitude certainty. For managers, customer segmentation along the assessment dimension offers benefits, while assessment type marketing communications can increase the likelihood of product selection, like in our field study, where we find an increase of 27%.

PurposeThis paper considers a supply chain with a manufacturer (she) selling through an online retail platform (he) and studies the channel structure choices of two firms when investing in advertising.Design/methodology/approachThe authors assume that the platform provides the manufacturer with an agency and/or reselling channel; thus, there are three possible channel structures: agency channel, reselling channel and dual channel. By developing a game-theoretic model, the authors investigate the channel structure choices of two firms when advertising separately, simultaneously and cooperatively and analyze the optimal combination strategy of channel structure and advertising scheme for both firms.FindingsWhen the advertising efforts of the two firms are independent of each other, the equilibrium results show that different advertising schemes lead to different channel choices. For the manufacturer, it is optimal to choose the dual channel structure and adopt the advertising scheme that both subsidizes platform advertising and advertises on her own. For the platform, this combination is also optimal at a high commission rate; otherwise, the advertising scheme in which both firms advertise simultaneously is optimal and he is better off switching from the dual channel structure to the reselling channel structure as interchannel substitution intensity increases. The above results still hold for complementary advertising efforts and asymmetric marginal advertising costs, while in the case of substitutable advertising efforts, one firm may ride on another firm's advertising efforts, leading to different strategic combinations.Originality/valueThis paper not only provides useful guidance for manufacturers and platforms in channel selection and advertising strategy, but also theoretically enriches the literature on manufacturer encroachment.

This article examines how the consumer's search cost and filtering on a retail platform affect the platform, the third-party sellers, and the consumers. The authors show that, given the platform's percentage referral fee, a lower search cost can either increase or decrease the platform's profit. By contrast, if the platform optimally adjusts its referral fee, a lower search cost will increase the platform's profit. As the consumer's search cost decreases, if the platform's demand elasticity increases significantly, the platform should reduce its fee, potentially resulting in an all-win outcome for the platform, the sellers, and the consumers; otherwise, a lower search cost will increase the platform's optimal fee percentage, potentially leading to higher equilibrium retail prices. Furthermore, the availability of filtering on the platform will in expectation induce consumers to search fewer products but buy products with higher match values, and filtering can either increase or decrease equilibrium retail prices. When filtering reveals only a small amount of the products' match-value variations, it will benefit the platform, the sellers, and the consumers. This article shows that the effects of filtering and those of a decrease in search cost are qualitatively different.

Numerous online retail platforms have begun to operate in a hybrid mode, which blends the use of a traditional reselling mode (operated by the platform owner) and increasingly prevalent agency-selling mode (operated by the affiliated agency sellers) to leverage internal and external resources. Two types of sellers interact and cooperate to improve the competitiveness of the hybrid platform in the online market. Although the hybrid mode is an inevitable trend that helps alleviate the burden of product expansion for reselling, reselling may also face sales cannibalization from agency selling. We empirically explore the effects of agency selling on reselling by using panel vector autoregression. Findings show that agency selling has a positive effect on reselling. The number of agency sellers may strengthen, whereas the market concentration of agency selling will weaken such effect. Furthermore, agency- selling participation is harmful to the positive effect of agency selling on reselling but is statistically marginally significant. These findings have important theoretical implications to enrich the two-sided market and extend the interorganizational relationship and coopetition theories. Moreover, our results also offer several crucial managerial implications for platform owners.

Retail platforms have widely implemented recommender systems to provide personalized recommendations to consumers, influencing sales significantly. However, under the hybrid selling mode where platforms offer both their products and third-party sellers’ products, the profitability of a recommender system and the optimal allocation of recommendations become critical considerations. This paper introduces a game-theoretic model to investigate these issues and unveil how a recommender system and its characteristics influence prices and profits. A key finding is that the recommender system increases prices and profits only if the commission rate is high and the system is profit-oriented or inaccurate. Surprisingly, higher recommendation accuracy does not always translate into higher profits; it is advantageous only in a consumer-oriented system. Moreover, the retail platform tends to allocate more recommendations to its own product than to the third-party seller’s product, a strategy known as self-preferencing. This strategy gives the platform a competitive edge and boosts its profit compared to the third-party seller. Furthermore, the degree of self-preferencing varies with the accuracy and orientation of the recommendation system. Specifically, in a consumer-oriented system, self-preferencing increases with accuracy, while in a profit-oriented system, it decreases with accuracy.

Channel encroachment intensifies competition among channels and changes the relationships within the supply chain. This study examines the manufacturer’s agency channel encroachment decision and its impact when it has already operated a platform reselling channel and a retailer channel on the platform. Equilibrium results reveal that the manufacturer’s agency channel encroachment triggers a competition effect, leading to a reduction in market demand for both the platform’s reselling channel and the retailer’s channel, as a larger share of the market shifts toward the manufacturer’s agency channel. To compensate for the losses in sales experienced by the platform and retailer, the manufacturer lowers the wholesale price. The manufacturer consistently benefits from channel encroachment and a Pareto improvement region exists, allowing all supply chain participants to improve their profits. The model is extended to consider sequential decision-making and asymmetric substitution. In comparison, under sequential decision-making, the manufacturer tends to focus more on the competitive effects of channel encroachment, leading to a reduction in channel sales. However, this approach only enhances the manufacturer’s agency profit when the retailer’s substitution capability is relatively strong. The manufacturer faces greater competitive pressure from the retailer under asymmetric channel substitution. Although the manufacturer increases the wholesale price and adjusts sales across channels according to the competitive situation, its profits are always lower than in the symmetric substitution case. The presence of a Pareto improvement region in the extended model confirms the robustness of our findings.

Observing the fast development of livestreaming, this paper investigates its adoption on the retail platform and examines its impact on merchants. We develop a game-theoretic model in which a leading retailer and a third-party seller engage in price competition. Our model fully considers the initiative of live streamers in this asymmetric competition. We find that the streamer’s cost and the seller’s initial awareness are two key factors affecting the adoption of livestreaming. Specifically, when the streamer’s cost is low, or it is intermediate and the seller’s initial awareness is high, the retailer adopts and opens livestreaming and the seller also adopts it; when both factors are intermediate, the retailer adopts livestreaming but does not open it to the seller; when both factors are high, the retailer adopts and opens livestreaming but the seller does not adopt it; otherwise, the retailer does not adopt livestreaming. Our results also suggest that the presence of livestreaming benefits the retailer but may hurt the seller especially when the seller’s initial awareness is high. Our findings provide relevant and useful implications for both the platform retailer and third-party seller in their livestreaming decisions.

Considering customer value and value-added services provided by the online retail platform, this paper studies the differential pricing of a dual-channel supply chain consisting of one manufacturer and one online retail platform. Taking customer value into account in the dual-channel supply chain, this paper constructs separate and unified pricing of the direct sales channel and online retail platform’s distribution channel, and discusses each pricing model under a decentralized decision scenario and centralized decision scenario respectively. The results show that the total profit of a supply chain under the centralized decision scenario is better than the decentralized decision scenario in different ways, and the customer value of the two channels is also higher. Compared with the unified pricing of the two channels, the profit of the manufacturer is larger while the profit of the online retail platform is smaller under the separate pricing of the two channels. Moreover, the benefit of value-added services remains important to maximize the profit of the online retail platform and the customer value at the same time. Whether it is under separate pricing or unified pricing of the two channels, the antinomies effect always exists between the customer value and the profit per unit product. In order to further improve each party’s profit in the dual-channel supply chain under the decentralized decision scenario, it is necessary to improve the customer perception of profit as much as possible, and reduce the customer perception of loss as much as possible.

PurposeOnline retail platform corporate sustainable development (ORPCSD) has garnered significant interest and appeal among consumers. However, no scale has been developed to measure consumer perceptions of ORPCSD. Therefore, this study aimed to delineate the conceptual framework and dimensions underlying these perceptions and construct a reliable and valid measurement tool.Design/methodology/approachThis study employed established qualitative and quantitative methods in two studies. In the first study, the dimensions and measurement items of consumer perceptions of ORPCSD were proposed using the grounded method. In the second study, the measurement scale was refined and validated using exploratory factor analysis, confirmatory factor analysis, and nomological validity examination.FindingsThe results indicated that consumer perception of ORPCSD consisted of three dimensions: economic, social, and environmental sustainability. The measurement scale for these dimensions comprised 25 items, demonstrating excellent psychometric properties.Originality/valueThis study contributes original insights by enhancing the current understanding of consumer perceptions of ORPCSD. Additionally, it provides researchers and managers with psychometric metrics to gauge these perceptions and offers actionable strategies for sustainable marketing initiatives.