Redemption-in-store or ship-to-home? Order fulfillment mode choice of physical retailing with livestreaming selling

Purpose Livestreaming selling has developed rapidly in recent years. Apart from the e-tailers who pioneer the introduction of livestreaming, physical retailers have increasingly adopted livestreaming, where their livestreaming orders are typically fulfilled by physical stores through either buy-online-redemption-in-store (BORS) or buy-online-ship-to-home (BOSH). These two fulfillment modes involve a trade-off between redemption probability and in-store cross-selling. However, to the best of our knowledge, no prior model integrates redemption probability and cross-selling in the livestreaming context. We fill this gap by developing an analytical framework that integrates these two key factors to investigate the retailer’s optimal fulfillment mode. Design/methodology/approach This paper establishes theoretical models with the livestreaming order fulfillments modes of BORS and BOSH. It identifies the conditions for the adoption of the optimal fulfillment modes of physical retailers in livestreaming. Findings The optimal livestreaming order fulfillment mode of physical retailer depends on the streamer’s ability, cross-selling revenue, the redemption probability and the convenience cost of delivery service. BORS may be the equilibrium mode despite it typically involves a high redemptions risk. Furthermore, an increasing streamer’s ability does not necessary increases total demand, and instead may only change the composition of consumers. Different from conventional wisdom that suggests BORS prices are typically lower than BOSH prices, our study shows that BORS prices may be higher than BOSH prices under certain condition. Originality/value This paper offers a novel perspective on physical retailing in livestreaming selling. Additionally, it examines two prevalent livestreaming order fulfillment modes, helping physical retailers navigate digital transformation more effectively.