Pricing and Service Decisions of Products in a Dual-Channel Supply Chain Introducing Ship-to-Store

This study investigates the optimal pricing and service decisions when implementing ship-to-store (STS) in a dual-channel supply chain comprising one BM store and one manufacturer. Homogeneous products within the market are categorized into mainstream and niche products. The effects of consumer service sensitivity, channel preference, and degree of personalization on optimal decisions and profitability are analyzed, followed by numerical simulation and analysis. It is found that (1) the supply chain should charge high prices for mainstream products and low prices for niche products to maximize profits. (2) Implementing STS is conducive to expanding niche products in the market when facing highly service-sensitive consumer groups. (3) Based on highly service-sensitive consumer segments, supply chains are more profitable implementing STS strategies in a centralized decision-making model than in a traditional dual-channel one; however, under decentralized decision-making, it is only profitable to implement an STS strategy if consumers have a low level of personalization and have a particularly pronounced preference for online direct marketing channels.