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29 Feb
IE-BAO Seminar: Subodha Kumar, "Benefit of Consumer Showrooming for a Physical Retailer: A Distribution Channel Perspective"
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Department of Industrial Engineering
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IE-BAO Seminar: Subodha Kumar, "Benefit of Consumer Showrooming for a Physical Retailer: A Distribution Channel Perspective"

This is a past event.

Abstract: Consumer showrooming has become a common phenomenon in the retail industry, but little is known about its influence on the interplay between an upstream supplier and a downstream retailer in a distribution channel. Our study examines such an influence by considering an upstream supplier who sells a product through a downstream physical retailer based on a wholesale contract. At the same time, based on an agency contract, the supplier sells the product on an online retail platform where a non-neglectable amount of consumer returns occurs due to product misfits. We find that, on the one hand, consumer showrooming enables the supplier to take a greater share of the offline channel profit by exploiting the physical retailer’s deterrence of showrooming. On the other hand, consumer showrooming as a mixed-channel shopping method makes the supplier less capable of adjusting the direct online demand according to her marginal cost of handling returns. Such a return-loss-propagation-moderating effect protects the downstream physical retailer from the upstream supplier’s strategic pricing that intends to shift sales from offline to direct online when the supplier finds it cost-efficient to handle online product returns. Our study also shows that the retailer can replace the wholesale contract with the store-within-a-store model with a rental fee contract to leverage the upstream supplier’s incentive to mitigate the adverse effect of showrooming. The findings inform the physical retailer that the more critical issue may not be showrooming itself but aligning with the upstream supplier to promote offline sales in the presence of showrooming.

Bio: Subodha Kumar is the Paul R. Anderson Distinguished Chair Professor of Statistics, Operations, and Data Science and the Founding Director of the Center for Business Analytics and Disruptive Technologies at Temple University’s Fox School of Business. He has a secondary appointment in Information Systems. He also serves as the Concentration Director for Ph.D. Program in Operations and Supply Chain Management. He is a board member of many organizations. China’s Ministry of Education has awarded him a Changjiang Scholars Chair Professorship. He is also a Visiting Professor at the Indian School of Business (ISB). He has served on the University of Washington and Texas A&M University faculty. Subodha was awarded the INFORMS Information Systems Society (ISS) Distinguished Fellow Award in 2023. He was also elected to become a Production and Operations Management Society (POMS) Fellow in 2019. To honor Subodha, the Management and Business Review has instituted “The Subodha Kumar and Geoffrey G. Parker Award for Research on Digital Transformation.” He has received numerous other research and teaching awards. He has published more than 240 papers in reputed journals and refereed conferences. He was ranked #1 worldwide for publishing in Information Systems Research. In addition, he has authored two books, book chapters, Harvard Business School cases, and Ivey Business School cases. He also holds a robotics patent. He is a recipient of several grants from national agencies such as the National Institute of Health (NIH). He is routinely cited in different media outlets, including the Wall Street Journal, the New York Times, Business Week, NBC, CBS, Fox, Marketplace, the New York Post, and U.S. News. He is the Deputy Editor of the Production and Operations Management Journal and the Founding Executive Editor of Management and Business Review (MBR). He also serves on other editorial boards. He has been the keynote speaker and track/cluster chair at leading conferences. He was the conference chair for the POMS Annual Conference 2018 and Decision Sciences Institute (DSI) Annual Conference 2018 and has co-chaired several other conferences. More details are available at: https://sites.temple.edu/subodha/

 

Thursday, February 29 at 3:30 p.m. to 4:30 p.m.

Benedum Hall, 102
3700 O'Hara Street, Pittsburgh, PA 15261

IE-BAO Seminar: Subodha Kumar, "Benefit of Consumer Showrooming for a Physical Retailer: A Distribution Channel Perspective"

Abstract: Consumer showrooming has become a common phenomenon in the retail industry, but little is known about its influence on the interplay between an upstream supplier and a downstream retailer in a distribution channel. Our study examines such an influence by considering an upstream supplier who sells a product through a downstream physical retailer based on a wholesale contract. At the same time, based on an agency contract, the supplier sells the product on an online retail platform where a non-neglectable amount of consumer returns occurs due to product misfits. We find that, on the one hand, consumer showrooming enables the supplier to take a greater share of the offline channel profit by exploiting the physical retailer’s deterrence of showrooming. On the other hand, consumer showrooming as a mixed-channel shopping method makes the supplier less capable of adjusting the direct online demand according to her marginal cost of handling returns. Such a return-loss-propagation-moderating effect protects the downstream physical retailer from the upstream supplier’s strategic pricing that intends to shift sales from offline to direct online when the supplier finds it cost-efficient to handle online product returns. Our study also shows that the retailer can replace the wholesale contract with the store-within-a-store model with a rental fee contract to leverage the upstream supplier’s incentive to mitigate the adverse effect of showrooming. The findings inform the physical retailer that the more critical issue may not be showrooming itself but aligning with the upstream supplier to promote offline sales in the presence of showrooming.

Bio: Subodha Kumar is the Paul R. Anderson Distinguished Chair Professor of Statistics, Operations, and Data Science and the Founding Director of the Center for Business Analytics and Disruptive Technologies at Temple University’s Fox School of Business. He has a secondary appointment in Information Systems. He also serves as the Concentration Director for Ph.D. Program in Operations and Supply Chain Management. He is a board member of many organizations. China’s Ministry of Education has awarded him a Changjiang Scholars Chair Professorship. He is also a Visiting Professor at the Indian School of Business (ISB). He has served on the University of Washington and Texas A&M University faculty. Subodha was awarded the INFORMS Information Systems Society (ISS) Distinguished Fellow Award in 2023. He was also elected to become a Production and Operations Management Society (POMS) Fellow in 2019. To honor Subodha, the Management and Business Review has instituted “The Subodha Kumar and Geoffrey G. Parker Award for Research on Digital Transformation.” He has received numerous other research and teaching awards. He has published more than 240 papers in reputed journals and refereed conferences. He was ranked #1 worldwide for publishing in Information Systems Research. In addition, he has authored two books, book chapters, Harvard Business School cases, and Ivey Business School cases. He also holds a robotics patent. He is a recipient of several grants from national agencies such as the National Institute of Health (NIH). He is routinely cited in different media outlets, including the Wall Street Journal, the New York Times, Business Week, NBC, CBS, Fox, Marketplace, the New York Post, and U.S. News. He is the Deputy Editor of the Production and Operations Management Journal and the Founding Executive Editor of Management and Business Review (MBR). He also serves on other editorial boards. He has been the keynote speaker and track/cluster chair at leading conferences. He was the conference chair for the POMS Annual Conference 2018 and Decision Sciences Institute (DSI) Annual Conference 2018 and has co-chaired several other conferences. More details are available at: https://sites.temple.edu/subodha/

 

Thursday, February 29 at 3:30 p.m. to 4:30 p.m.

Benedum Hall, 102
3700 O'Hara Street, Pittsburgh, PA 15261

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