129 / 2024-04-21 15:20:26

Operating conditions of joining platform channels under two-dimensional customer heterogeneity

operational conditions,customer heterogeneity,platform

In this paper, we study the operational conditions of joining platform channels under two-dimensional consumers hererogeneity. We assume that customers have a priori valuation which determines to purchase or not and a posterior valuation which determines to return or keep. Besides, the two valuations is in a clear temporal order. We found that the level of customer waiting from the platform channel determines the upper bound of the price. This is due to the fact that excessively long logistics make consumers less willing to buy. The only way to compensate for this is to lower the price. The hassle cost of returning goods from the offline channel determines the lower bound of the price. This corresponds to the fact that the hassle cost of return is usually extremely high for some extremely expensive items such as large appliances. To the best of our knowledge, this paper is the first to define both the prior and posterior valuations obeying the uniform distribution in customer's heterogeneity.