Omnichannel Operations Management

This dissertation studies how a firm could effectively make use of different selling channels to provide consumers with a seamless shopping experience. In the three essays, by analyzing stylized models where firms operates both online and offline channels and consumers strategically make channel choices, we examine the impacts of different types of omnichannel strategies in different industries. In the first essay, we focus on a specific omnichannel fulfillment strategy, i.e., buy-online-and-pick-up-in-store (BOPS). We find it may not be profitable to implement BOPS on products that sell well in stores. We also consider a decentralized retail system where store and online channels are managed separately, and find it is rarely efficient to allocate all BOPS revenue to a single channel. In the second essay, we study how retailers can effectively deliver product and inventory information to omnichannel consumers who strategically choose whether to gather information online/offline and whether to buy products online/offline. Specifically, we consider three information mechanisms: physical showrooms, virtual showrooms, and availability information. Our main result is that these information mechanisms may sometimes change customers’ channel choice in a way such that total product returns increase and total retail profit decreases. In the third essay, we look at the restaurant industry. Specifically, we study the impacts of different self-order technologies on service operations. Online technology, through websites and mobile apps, allows customers to order and pay before coming to the store; offline technology, such as self-service kiosks, allows store customers to place orders without interacting with a human employee. We develop a stylized queueing model and study the impacts of self-order technologies on customer demand, employment levels, and restaurant profits. We find there could be a win-win-win situation, where everyone in the market, i.e., consumers (including those who do not use the technology), workers and the firm, could benefit from the implementation of the self-order technologies