Influence of showrooming and price matching strategy to combat showrooming under different costs
International Journal of Retail & Distribution Management
ISSN: 0959-0552
Article publication date: 2 May 2023
Issue publication date: 18 July 2023
Abstract
Purpose
In this paper, the authors explore the consequences of showrooming and price matching strategy to combat showrooming under the consideration that brick-and-mortar (BM) stores and online retailers hold different costs.
Design/methodology/approach
The authors use a duopoly model to analyze the impact of showrooming behavior on competition between a BM store and an online retailer with different types of customers and different costs. Then, they consider the price matching strategy that a BM store could employ to combat showrooming and explore the effect of such a strategy.
Findings
Showrooming behavior is detrimental to the profit of the BM store, and the online retailer suffers a loss of their profit unless the relative cost of the BM store is high and only part of the customers exhibit showrooming behavior. As the fraction of customers who seek price matching increases, profits of both the BM store and the online retailer initially decrease and then may increase, even if there is no showrooming.
Originality/value
Unlike existing studies that ignore different costs between online and offline retailers, the authors set different costs between the BM store and the online retailer to consider the effects of showrooming and price matching strategy.
Keywords
Acknowledgements
This research did not receive any specific grant from funding agencies in the public, commercial or not-for-profit sectors.
Funding: This paper is supported by the program B for Outstanding PhD candidate of Nanjing University (Grant Number 202201B005).
Citation
Su, Y. and Tian, M. (2023), "Influence of showrooming and price matching strategy to combat showrooming under different costs", International Journal of Retail & Distribution Management, Vol. 51 No. 7, pp. 876-893. https://doi.org/10.1108/IJRDM-06-2022-0182
Publisher
:Emerald Publishing Limited
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