Seeking survivals under COVID-19: the WhatsApp platform's shopping service operations
Seeking survivals under COVID-19: the WhatsApp platform's shopping service operations
Under COVID-19 outbreak, retail operations are seriously threatened. There are lots of cases in which physical stores basically have to stop operating. This creates problems to the firm, its employees, and consumers. Recently, Timberland in Hong Kong and various other brands such as Joyce Boutiques and The North Face have established the "WhatsApp Shopping Service Operation" (WSO) in which consumers can shop by using the well-established communication tool "WhatsApp." Salespeople in stores provide services via WhatsApp to assist the consumers without them having to visit the stores. We collect primary data from real-world cases and theoretically explore WSO. We build a standard consumer utility based model to derive the firm's optimal pricing and employment decisions under different cases. We evaluate the impacts of COVID-19 and values of WSO implementation from the "Worker-Consumer-Company" (WCC) welfare perspective. Our results interestingly imply that WSO is superior to the traditional online channel in terms of keeping business under the pandemic; meanwhile, implementing WSO can help stimulate demand in the physical store under COVID-19. However, whether WSO is effective to help increase the firm's profit and WCC welfare depends on both consumer type' distribution and consumers' fear of infection. When consumers' fear of infection is very polarized (i.e., extremely low or high), WSO is not recommended. We further propose that the government's subsidy for WSO implementation could be an effective way to help the firm improve its profit and WCC welfare. We also check the robustness of our study by extending the model to consider endogenous consumer type, endogenous service level, and WCC-welfare-oriented firm.
375-393
Xu, Xiaoyan
98b815b6-5ac4-42cf-8429-da5cb889ab8c
Siqin, Tana
bc7862c3-cef4-4ea3-a67f-a1972c847c82
Chung, Sai-Ho
70dcb405-2750-4d44-a6b8-49b4c9a6d523
Choi, Tsan-Ming
594d42c1-0264-4e78-afc3-aa6076284cf4
Xu, Xiaoyan
98b815b6-5ac4-42cf-8429-da5cb889ab8c
Siqin, Tana
bc7862c3-cef4-4ea3-a67f-a1972c847c82
Chung, Sai-Ho
70dcb405-2750-4d44-a6b8-49b4c9a6d523
Choi, Tsan-Ming
594d42c1-0264-4e78-afc3-aa6076284cf4
Xu, Xiaoyan, Siqin, Tana, Chung, Sai-Ho and Choi, Tsan-Ming
(2021)
Seeking survivals under COVID-19: the WhatsApp platform's shopping service operations.
Decision Sciences, 54 (4), .
(doi:10.1111/deci.12552).
Abstract
Under COVID-19 outbreak, retail operations are seriously threatened. There are lots of cases in which physical stores basically have to stop operating. This creates problems to the firm, its employees, and consumers. Recently, Timberland in Hong Kong and various other brands such as Joyce Boutiques and The North Face have established the "WhatsApp Shopping Service Operation" (WSO) in which consumers can shop by using the well-established communication tool "WhatsApp." Salespeople in stores provide services via WhatsApp to assist the consumers without them having to visit the stores. We collect primary data from real-world cases and theoretically explore WSO. We build a standard consumer utility based model to derive the firm's optimal pricing and employment decisions under different cases. We evaluate the impacts of COVID-19 and values of WSO implementation from the "Worker-Consumer-Company" (WCC) welfare perspective. Our results interestingly imply that WSO is superior to the traditional online channel in terms of keeping business under the pandemic; meanwhile, implementing WSO can help stimulate demand in the physical store under COVID-19. However, whether WSO is effective to help increase the firm's profit and WCC welfare depends on both consumer type' distribution and consumers' fear of infection. When consumers' fear of infection is very polarized (i.e., extremely low or high), WSO is not recommended. We further propose that the government's subsidy for WSO implementation could be an effective way to help the firm improve its profit and WCC welfare. We also check the robustness of our study by extending the model to consider endogenous consumer type, endogenous service level, and WCC-welfare-oriented firm.
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Accepted/In Press date: 22 September 2021
e-pub ahead of print date: 23 November 2021
Additional Information:
© 2021 Decision Sciences Institute.
Identifiers
Local EPrints ID: 486856
URI: http://eprints.soton.ac.uk/id/eprint/486856
ISSN: 0011-7315
PURE UUID: 2a16d5b1-c18c-4502-9399-8aaa4f6880d1
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Date deposited: 07 Feb 2024 17:41
Last modified: 18 Mar 2024 04:18
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Author:
Xiaoyan Xu
Author:
Tana Siqin
Author:
Sai-Ho Chung
Author:
Tsan-Ming Choi
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