• Korean Management Science Review
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• v.33 no.4
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• pp.77-89
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• 2016

Due to recent proliferation of the mobile shopping channels, customers increasingly tend to purchase using online channel while experiencing physical products in offline shops. This phenomenon requires traditional offline retailers to consider integrating online channels. In this study, we propose strategic options for the traditional offline retailers regarding the online channel integration, and provide corresponding decision models to maximize the expected profits. We also investigate how the strategic options vary with the product characteristics, by categorizing the products based on inventory cost, demand uncertainty, and fitness to the online channels. By analyzing numerical examples we illustrate how the best online channel integration strategy should be differentiated depending on the product categories.