This study by Subodha Kumar and colleague, published in Information Systems Research, develops a model for optimal joint assortment and pricing for omni-channel retailers serving customers with heterogeneous channel preferences. It shows the optimal assortment combines customized products targeted to a specific channel and omni-channel products appealing across channels. The mix depends on customer flexibility and class sizes. The study reveals that selling niche products online is not always best, especially when costs and customer numbers favor the BM channel. Pricing decisions depend on channel costs and customer preferences, with the possibility of differential pricing. The model also accounts for customers shopping exclusively from one channel, highlighting strategic roles for common products.
Optimal Joint Assortment for an Omni-Channel Retailer
