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Have Your Cake and Eat It? Price Discount Programs under the Membership Free Shipping Policy in Online Retailing
Journal of Theoretical and Applied Electronic Commerce Research ( IF 5.318 ) Pub Date : 2024-01-26 , DOI: 10.3390/jtaer19010012
Zhipeng Tang 1 , Guowei Hua 1, 2 , Tai Chiu Edwin Cheng 3 , Xiaowei Li 4 , Jingxin Dong 5
Affiliation  

Online retailers offer free shipping services, such as threshold free shipping (TFS) and membership free shipping (MFS), to promote sales and provide a better shopping experience to consumers in online retailing. Although MFS attracts more member-consumers, it encourages consumers to place more small orders than TFS, which significantly increases the operational costs of the online retailer. To address this issue, we propose two price discount policies under the MFS service, namely the limited-time discount and the threshold discount. Then, we build analytical models under these two policies to explore the impacts of offering price discounts on the retailer’s profit and consumers’ welfare. We find that no matter which discount policy is adopted, consumers are more likely to consolidate several small orders from different time periods into a big one to obtain the discount. The economies of scale generated by consumers consolidating their orders under these discount policies can help reduce online retailers’ operational costs. Therefore, regardless of any discount policy offered by the online retailer under the MFS service, consumers will place more big orders and more member-consumers are attracted, i.e., the online retailer can have its cake and eat it too. Our research findings provide decision-making insights for practitioners who offer free shipping services and price discounts to consumers in online retailing.

中文翻译:

有蛋糕并吃掉它吗?网上零售会员免运费政策下的价格折扣计划

在线零售商提供免运费服务,例如阈值免运费(TFS)和会员免运费(MFS),以促进销售并为在线零售消费者提供更好的购物体验。尽管MFS吸引了更多的会员消费者,但它比TFS鼓励消费者下更多的小订单,这显着增加了在线零售商的运营成本。针对这个问题,我们在MFS服务下提出了两种价格折扣政策,即限时折扣和门槛折扣。然后,我们在这两项政策下建立分析模型,探讨提供价格折扣对零售商利润和消费者福利的影响。我们发现,无论采用哪种折扣政策,消费者都更有可能将不同时间段的几笔小订单合并为一笔大订单来获得折扣。消费者根据这些折扣政策整合订单所产生的规模经济有助于降低在线零售商的运营成本。因此,无论网络零售商在MFS服务下提供何种折扣政策,消费者都会下更多的大单,吸引更多的会员消费者,即网络零售商鱼与熊掌兼得。我们的研究结果为在线零售中向消费者提供免费送货服务和价格折扣的从业者提供了决策见解。
更新日期:2024-01-26
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