Pricing analysis and coordination of a dual-channel supply chain considering online reviews and in-store service

Purpose The paper attempts to discuss the optimal pricing decisions and analyze the influence of online reviews and in-store service on dual-channel supply chain and design a coordination mechanism. Design/methodology/approach To analyze the effect of the online reviews and in-store service of the traditional retailer on supply chain, we establish some dual-channel supply chain models considering online reviews and in-store service and discuss the optimal pricing decisions under either centralized decision or manufacturer-led decentralized decision and analyze the influence of the input level of online reviews and in-store service on dual-channel supply chain. Finally, we design a coordination mechanism through a two-part tariff contract. Findings The results show that (1) The manufacturer's optimal online direct selling price is positively correlated with the input level of online reviews and negatively corelated with the input level of in-store service. (2) The input level of online reviews has a scope. With continuous increase of the input level of online reviews, the manufacturer's profit curve shows a trend of first increasing and then decreasing. (3) The input level of in-store service has a smaller scope. With continuous increase of the input level of online reviews, the retailer's profit curve shows a trend of rapid decline after a short rise. Originality/value The proposed approach can well analyze the channel conflicts and pricing problems between retailers and manufacturers with respect to product offline price and online price.