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Purpose – The purpose of this paper is to evaluate the interaction between inventory availability (scarcity) and pricing levels (price-leadership (PL)), and its effect on product returns in the internet retail supply chain. Specifically, this paper investigates how supply chain managers can use inventory (seller-induced scarcity) and pricing (PL) levers to control product returns. Design/methodology/approach – Empirical data of sales and product returns from an internet retailer is analyzed to identify the scale of the effect that product scarcity and PL has on product returns. These factors are considered in developing a sales-return process model which is used with empirical data in a simulation study. The study evaluates changes in product returns for different policy settings related to PL and inventory levels. Findings of the simulation study are validated using statistical analysis of empirical data. Findings – PL and seller-induced product scarcity affect the rate of product returns; however, the scale of this effect depends on inventory and pricing decisions. The results identify an inflection boundary based on scarcity and PL levels which reverses this effect. This reversal is explained by underlying principles at play regarding buyers’ valuation of the sale and corresponding product attributes. Practical implications – Supply chain managers in internet retail can leverage lower inventory under the seller-induced scarcity approach to improve revenues. However, reducing inventory levels beyond a threshold is counterproductive, due to an associated increase in product returns. Similarly, setting market competitive prices (PL) can help reduce product returns. Under the seller-induced scarcity condition, this effect is reversed for inventory levels below a threshold. Retailers can implement the methodology developed in this paper to identify the inventory-price threshold that can help increase revenues while keeping the rate of product returns at a manageable level. Originality/value – This research extends prior work regarding the role of product scarcity and pricing on product returns and develops a deeper understanding of how these factors can be managed to control product returns in the internet retail setting. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to identify the realignment of the physical distribution process for store-based retailers in their efforts to integrate the online channel into their business model. Multiple attributes of the physical distribution process are evaluated to identify associations with order fulfillment methods adopted by omni-channel retailers. Design/methodology/approach – A multi-method approach is used which includes qualitative evaluation of 50 interviews of supply chain executives from large retailers. Additionally, secondary data about firm size, store and distribution networks, online sales, distribution configuration, and order delivery options are used. The findings of qualitative analysis are incorporated into a quantitative classification-tree analysis to identify associations among distribution attributes, order fulfillment methods and order delivery services. Findings – Retailers are developing a consistent omni-channel physical distribution process in which stores undertake a bigger role in order fulfillment and delivery. Level of online sales, size of distribution network, number of sales associates at a store, and number of years engaged in the online channel are identified as having strong associations with the type of order fulfillment method used by omni-channel retailers. The study finds that retailers are focussed on integrating their store and DC inventories and have the benefit of scale with a large store network. Practical implications – Retailers are reconfiguring their physical distribution processes in the complex omni-channel environment can use the findings of this study to evaluate their strategy and identify the level of realignment effort that is needed. A better understanding of the requirements of physical distribution in an omni-channel setting will guide retailers in developing requisite operational capabilities. Originality/value – This paper provides a first in-depth look at order fulfillment choices in omni-channel retail and identifies efforts that are underway to realign key elements of the physical distribution process. [ABSTRACT FROM AUTHOR]