As digital technology continues to evolve rapidly, companies are increasingly turning to innovative retail strategies to meet the shifting demands of modern consumers. One such approach is the buy-online-and-assemble-in-store (BOAS) model, which allows customers to place orders online, collect their purchases at physical stores, and benefit from on-site assembly services. This hybrid approach aims to blend the convenience of online shopping with the personal touch of in-store experiences. However, despite its appeal, the financial viability of BOAS for firms remains uncertain, primarily due to unpredictable post-processing costs. Furthermore, the broader implications of this model for consumers and the environment are becoming critical areas of interest for researchers and business leaders alike.

A recent study published in the KeAi journal, Sustainable Operations and Computers, by researchers at the South China University of Technology, explores these complexities. The study focuses on a monopolistic firm selling products that require some degree of consumer-led assembly for practical use. Lead author Guanxiang Zhang emphasises that consumer diversity is a central factor in the success or failure of the BOAS model. Specifically, the study identifies two distinct consumer types: professional consumers, who possess greater post-processing skills and prioritise product quality and price, and amateur consumers, who prefer convenience and service quality due to their limited technical capabilities. This segmentation is crucial, as it directly influences a firm’s decision to adopt or avoid the BOAS model.

The distribution of these consumer types significantly shapes a company’s strategic choices. Firms are generally more inclined to adopt BOAS when a substantial portion of their customer base consists of professional consumers, who can manage post-purchase processes more effectively and are less reliant on supplementary services. In contrast, when the costs associated with product handling, travel, and perceived service value are high, businesses may find it less advantageous to implement BOAS. This balance between customer capability and operational cost is critical for firms seeking to leverage this model successfully.

While BOAS can enhance the overall consumer experience, it also introduces potential risks. Zhang notes that the model can reduce consumer surplus in markets with a high proportion of professional consumers, potentially undermining its long-term viability. This paradox helps explain why some companies, like Uniqlo, have faced setbacks after introducing BOAS, struggling to maintain customer loyalty and profit margins. In contrast, firms like TUHU, which specialise in automotive services where professional consumers are more common, have effectively leveraged BOAS to gain a competitive advantage, demonstrating the importance of aligning retail strategies with customer profiles.

From an environmental perspective, the BOAS model presents both opportunities and challenges. Centralising assembly processes within physical stores can reduce waste and energy consumption by minimising the need for excessive packaging and long-distance transport. This approach also reduces the carbon footprint associated with dispersed, individual assembly, aligning with broader sustainability goals. However, this benefit must be weighed against the potential for increased travel emissions if consumers need to make multiple trips for assembly services, highlighting the need for a balanced approach.

In conclusion, while the BOAS model holds promise as a flexible, customer-centric retail strategy, its successful implementation requires a careful assessment of consumer demographics, cost structures, and environmental impacts. As Lipan Feng, the study’s corresponding author, points out, firms must navigate complex pricing dynamics, as introducing BOAS can lead to higher retail prices in online channels, potentially suppressing demand. This nuanced understanding underscores the importance of aligning operational decisions with long-term strategic goals, ensuring that the benefits of BOAS extend beyond mere convenience to encompass financial sustainability and environmental responsibility. As the retail landscape evolves, such insights will prove invaluable for businesses seeking to thrive in an increasingly interconnected marketplace.

More information: Lipan Feng et al, Effects of the buy-online-and-assemble-in-store approach: Implications for firms, consumers, and environment, Sustainable Operations and Computers. DOI: 10.1016/j.susoc.2025.03.001

Journal information: Sustainable Operations and Computers Provided by KeAi Communications Co., Ltd.