“Store Strategy”: A New Omni-Channel Strategy in Community Group Buying

Abstract

This paper explores a new omni-channel strategy—“store strategy”—in community group buying and investigates the impacts of the application of this strategy on the platform and community leader. Three models are developed: (1) The platform operates only in a single online channel. (2) The platform adopts a store strategy and delegates offline operations to a community leader. (3) The platform adopts a store strategy that includes self-establishing a store. After comparing different models, some interesting results are obtained as follows: (i) After the store strategy is adopted, the optimal online price remains unchanged, but new offline pricing varies, depending on the offline entry method. (ii) If the cost of the community leader operating the offline channel is low, the proportion of private consumers is particularly high. In this case, the store strategy that delegates operations to the community leader will achieve a win–win outcome. (iii) If the self-established cost is low and the proportion of private consumers is low, the store strategy with a self-establishing store will allow the platform to obtain higher profits, while greatly harming the community leader.