Omnichannel Strategy with Time Discount Rate

Abstract

This article studies a class of omnichannel strategies to respond to consumer behaviors with time discount rate. The time discount rate for products at which consumers evaluate them in a future moment is critical for the purchase strategies when an online firm thinks to open a shop in brick-and-mortar form to encourage consumers to purchase with information about the products. We analyze optimal behaviors of consumers and the firm in both online and real channels and conclude that omnichannel strategy is not optimal when the time discount rate is sufficiently high.