Abstract:In order to compete with the manufacturer, the retailer is beginning to take advantage of his offline channel to provide service for customers so as to promote demand. However, the service in the offline channel also has a spillover effect on the demand of manufacturer's online channel. This in turn makes the retailer lose the would-be demand. Under such situation, this paper investigates a cooperative scheme design issue for O2O namely online and offline channels. In order to solve this issue, a Stackelberg game model between the manufacturer and the retailer under the decentralized setting is built. Then, the impacts of service spillover effect and price competition degree between channels on optimal solutions are analyzed. On the basis of the centralized setting, a cooperative scheme for online and offline channels based on demand inducing is put forward. The results show that the retailer's enthusiasm for providing service will not always be inhibited. Moreover, the spillover effect can adjust the price competition according to the market share. Under the cooperative scheme, system-wide optimization can be achieved and supply chain members' Pareto improvements can be realized via arbitrary allocation of the system profit. Finally, the effectiveness of the cooperative scheme is verified through numerical examples.