Mobile App Online Website Dual Channel Strategies: Privacy Concerns, E Payment Convenience, Channel Relationship, and Coordination
Today, many mobile apps (MAs) act as an efficient channel for e tailers to sell products. In addition to selling, some of these apps even include e payment functions. This creates e payment convenience but also a concern on privacy. In this article, we consider a supply chain with an e tailer which sells through such an MA and an online website. The two channels influence the demand of one another. In the basic model, the e tailer decides the promotion efforts in both channels. We interestingly find that the optimal promotion efforts are independent of e payment convenience and privacy concern. We analytically establish that profit sharing contract and two part tariff contract can coordinate the dual channel supply chain system but not revenue sharing contract or sales rebate contract. In the extended models, we first consider the case when the e tailer makes product pricing as well as promotion efforts decisions together. We analytically derive the optimal solution and find that the optimal pricing and promotion efforts depend on e payment convenience and privacy concern. We further extend the analyses to the case when the e tailer is risk averse and uncover that: 1) when the retail selling price is exogenously given, the optimal promotion efforts between the risk neutral and risk averse e tailers are the same and 2) when the retail selling price is endogenous, the corresponding optimal retail selling prices and promotion efforts between the risk neutral and risk averse e tailers are different. In particular, a higher degree of risk aversion will lead to higher (lower) promotion efforts and a higher (lower) retail selling price if demand volatility is sufficiently large (small)
IEEE Transactions on Systems, Man, and Cybernetics: Systems