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Wang, H.; Pang, C.; Tang, H. BOPS Mode with Low-Carbon Preference from Customers. Encyclopedia. Available online: https://encyclopedia.pub/entry/46687 (accessed on 01 July 2024).
Wang H, Pang C, Tang H. BOPS Mode with Low-Carbon Preference from Customers. Encyclopedia. Available at: https://encyclopedia.pub/entry/46687. Accessed July 01, 2024.
Wang, Han, Chuan Pang, Huajun Tang. "BOPS Mode with Low-Carbon Preference from Customers" Encyclopedia, https://encyclopedia.pub/entry/46687 (accessed July 01, 2024).
Wang, H., Pang, C., & Tang, H. (2023, July 12). BOPS Mode with Low-Carbon Preference from Customers. In Encyclopedia. https://encyclopedia.pub/entry/46687
Wang, Han, et al. "BOPS Mode with Low-Carbon Preference from Customers." Encyclopedia. Web. 12 July, 2023.
BOPS Mode with Low-Carbon Preference from Customers
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This entry is adapted from the peer-reviewed paper 10.3390/math11122736

Rising competition in retailing forces retailers to seek an enriched shopping experience to gain and retain customers. Omnichannel fulfillment services such as Buy Online Pick-up in-Store (BOPS) blend online and offline experiences to provide more accessibility and flexibility for shoppers.

BOPS dual channel low-carbon supply chain cap and trade regulations

1. Introduction

Mitigating the impacts of climate change has been a worldwide consensus [1]. Over the past 200 years, the global temperature has risen 1.1 °C, and the emission levels keep rising. Net zero commitment has been backed by the United Nations, rallying all members (companies, cities, regions, institutions) to take transparent and immediate actions to reduce global emissions by 45% and achieve a fairer zero world by 2050, which is in line with the Paris Agreement [2]. To reach this ambitious goal, multiple government regulations have been proposed to reduce carbon emissions, such as carbon tax and carbon labeling [3][4]. The Cap and Trade (CAT) policy, used mainly across countries, is designed to reduce greenhouse gas emissions. The government sets the cap to limit companies emitting carbon dioxide within a given allowance. Trade allows firms to exchange their credits in a market when short or in surplus [5].
In addition to government regulations, green customers are the key to mitigating environmental degradation and nonrenewable depletion. End-customer demand is the tipping point that motivates the supply chain to take responsibility for environmental protection [6]. According to [7], a green consumption attitude affects purchasing intention, positively influencing purchasing behavior. More corporations take environmental protection as their social responsibility, stimulating green consumption [8]. The growing green consciousness increases market competition for green products. It is reported that 30% of customers would like to pay a higher price for green products and energy. In addition, Law, Hills and Hau stated that people with environmental consciousness could more easily present the character of loyalty and commitment. Firms that adopt green promotions strengthen customers’ trust and loyalty by portraying their image of sustainable development [9].
Rising competition in retailing forces retailers to seek an enriched shopping experience to gain and retain customers. Omnichannel fulfillment services such as Buy Online Pick-up in-Store (BOPS) blend online and offline experiences to provide more accessibility and flexibility for shoppers [10][11]. Customers can complete purchases at home and collect them at the selected pickup location [12][13]. They experience the convenience of shopping online without lengthy wait times and the sting of shipping. Returns or exchanges can also be processed on the same visit if the item does not fit customers’ expectations. This can also reduce carbon emissions from the transportation procedure [14][15]. Moreover, BOPS increases foot traffic to physical stores, giving retailers opportunities for cross-selling and upselling [16].

2. BOPS Research

Due to the growing popularity of BOPS, its economic significance has drawn continuous attention. Ref. [17] researched the BOPS’s cross-channel selling and channel-shift effects. They found that additional offline sales happen when customers buy online and pick up in-store. Furthermore, BOPS shifts customers from online platforms to brick-and-mortar channels. Ref. [18] studied the impact of cross-selling benefits, fixed cost of BOPS, heterogeneous customer behavior, BOPS convenience, operation cost and competitive intensity on the optimal profit. The impacts on quality, prices, and profits of a supply chain have been studied by Ref. [19].
Channel strategy is discussed in a competitive environment to explore whether introducing BOPS into dual-channel retailing is always profitable. Ref. [20] studied the price competition between leaders and followers in various scenarios from the perspective of channel integration to examine the implementation conditions for BOPS and the effects of market factors (product return) on two retailers’ profitability. Ref. [21] found that adopting BOPS and its price and service strategies depend on the experience sensitivity and the proportion of BOPS customers. Ref. [22] derived the optimal channel strategy (in which retailers can benefit from BOPS adoption) for single brick-and-mortar and double online and offline channels. Overserving the performance of service and profit, Ref. [23] found that a contract wherein a lump fee is paid from retailers to manufacturers coordinates the supply chain better than a revenue-sharing contract.
After adopting BOPS, the operation strategies are analyzed in many papers. Ref. [24] built an analytical model to investigate the relationship between store visiting costs and BOPS’ profit. Ref. [25] investigated the effects of the power structures (between retailers and manufacturers) on the optimal price and service decisions. With the information on customer behavior, hassle, and delivery costs, optimal store inventory is analyzed for retailers [26]. Other optimal decisions, including sales price, ordering quantity, service decisions, delivery schedule, cooperative advertising, and base-stock level in different inventory policy scenarios, are also discussed by various researchers [27][28][29][30][31][32].
Additionally, environmental protection performance has drawn some attention from a few scholars. Ref. [33] pointed out that BOPS reduces energy consumption by integrating online and store inventory and decreasing transshipment costs (i.e., lighting, packing, shipping). Ref. [34] studied sustainable retailing concerning the overpackaging problem, finding that BOPS has decreased environmental impacts. As BOPS increases the LCSC’s profit and reduces energy consumption, Ref. [35] designed a contract to incorporate BOPS into a low-carbon dual-channel supply chain, considering customers’ low-carbon preference (LCP). Hence, based on a low-carbon dual-channel supply chain adopting BOPS, this work derives optimal carbon-emission-reduction strategies from CAT regulations, considering customers’ green consciousness.
The above four streams of BOPS literature center primarily around its economic performance and operations. The existing literature rarely considers BOPS’s environmental benefits, with no mention of the channel integration and optimal strategies of LCSC with the BOPS channel in different scenarios. Based on an LCSC wherein customers can buy online and pick up in-store, this research analyzes the carbon-emission-reduction strategies with customers’ preference for low carbon under the CAT policy.

3. Low-Carbon Supply Chain under CAT Regulations

Several scholars focused on the channel strategy (single channel or dual channel) in an LCSC under CAT regulations. Ref. [36] took carbon trading into account. They conducted corresponding game models to compare manufacturers’ decision behaviors in dual channels, respectively. The impact of channel selections on carbon emission has also been explored. Ref. [37] derived the optimal channel strategy under the CAT regulation and stochastic demand pattern, considering customers’ low-carbon preferences. They also proved that buyback and task-sharing-reduction contracts could coordinate supply chain members in decentralized dual channels.
The prevalent issues of coordination mechanisms between retailers and manufacturers are also analyzed under the CAT policy. Ref. [38] studied dual-channel coordination and decision behaviors with the aspects of LCP and channel substitution. They found that low-carbon choice positively impacts the supply chain profit, and an improved revenue-sharing contract leads to Pareto improvement. Ref. [39] combined optimal emission abatement and production decisions and investigated a make-to-order supply chain coordinated by wholesale and cost-sharing contracts. A lump-sum-subsidy contract has been designed that achieves Pareto’s improvement of the efficiency between the two firms.
Various operation strategies of the LCSC are derived from CAT regulations. Ref. [40] studied the effects of carbon footprint and customers’ LCP on production strategy and profits under a CAT system. Decision behaviors in a two-echelon supply chain, including sustainability investment and selling price, are investigated in Ref. [39]. Additionally, it also revealed that trading prices affected optimal decisions. The impacts on a dual-channel supply chain’s profit were explored by Ref. [41] from emission abatement cost coefficient variables and low-carbon advertising effort strategies.
Optimal emission-reduction decision making is a primary focus among researchers considering different impact factors. Ref. [42] explored the influence of social preferences, customers, and low-carbon awareness on emission reduction, promotion, pricing decisions, supply chain profits, utilities, and system efficiency. They developed a contract to make the supply chain Pareto-optimal based on side payments, considering the social preferences’ effect. Ref. [43] conducted a game model in the cases of retailer dominance and power balance, respectively, to study the impacts of two joint carbon reduction contracts (wholesale price premium contract and the cost-sharing contract) on the firms’ profits and carbon reduction rate. Ref. [44] investigated remanufacturing’s impact on carbon-emission reduction and supply chain profits and identified an optimal collecting mode for the producer. Ref. [45] compared the optimal equilibrium strategies, including emission-reduction level, advertising effort, and selling price between retail and dual channel. They discussed the impacts of cooperative advertising and cost-sharing contracts on optimal decisions and dual-channel supply chain coordination. Ref. [5] examined the impact of CAT policy intensity and LCP on carbon-emission-reduction decisions and firms’ profits. Ref. [46] focused on the emission-reduction decisions under the retail and dual channels, respectively, considering low-carbon awareness. Furthermore, they studied the effects of CAT regulation on the firms’ profit and joint emission-reduction strategy on both carbon-emission-reduction behaviors and supply chain performance.
After discussing the related literature, the low-carbon customer preference and joint emission-reduction strategy are significant in the field of LCSCs. LCP is discussed by Refs. [5][42][46] to explore its impacts on emission reduction and supply chain profits. A joint emission-reduction strategy includes the carbon-emission-reduction behaviors of the manufacturer and low-carbon product advertising efforts of the retailer, which are widely used by Ref. [45]. Refs. [41][45] analyzed the effect of a retailer’s advertising campaign on emission reduction and profits. Ref. [46] compared joint and single emission-reduction strategies’ performance.
Although various issues in the LCSC with retail/dual channels under CAT regulations are developed soundly and widely, more environment-related discussion in BOPS has not been made. Above all, channel integration and operations are the heated topics in the BOPS and LCSC literature, respectively. Ref. [35] designed a supply contract to improve the performance of an LCSC with the BOPS channel.

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Subjects: Operations Research & Management Science
Contributors MDPI registered users' name will be linked to their SciProfiles pages. To register with us, please refer to https://encyclopedia.pub/register :
Han Wang
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Update Date: 13 Jul 2023
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