Optimal uniform pricing and return policies for channel strategies in E-commerce age

From a firm's perspective, there are three optional channel strategies (i.e. Bricks-only, Clicks-only and Bricks & Clicks) to fulfill the customer demands in E-commerce age. We use two-stage Stackelberg games where the manufacturer as a leader and her retailer as a follower to develop relative profit-maximization models and then to jointly obtain optimal policies for their retail prices and return policies under three channel scenarios respectively. Our numerical analysis further discusses the firms' channel strategy preferences to obtain a few managerial insights into marketing and operational strategies. Finally, we discuss several future research directions.