Title: Strategic pricing: examining the impact of showrooming behaviour on manufacturer-retailer dynamics in a supply chain

Authors: Ping Su; Xiangling Hu; Jaideep Motwani

Addresses: Department of Management and Entrepreneurship, Frank G. Zarb School of Business, Hofstra University, Hempstead, NY – 11549, USA ' Management Department, Seidman College of Business, Grand Valley State University, Grand Rapids, MI – 49504, USA ' Management Department, Seidman College of Business, Grand Valley State University, Grand Rapids, MI – 49504, USA

Abstract: We study a two-stage supply chain where a manufacturer sells through two competing retailers: a brick-and-mortar retailer and an online retailer. Using a Stackelberg game model, we examine the manufacturer's wholesale price and the BM retailer's sales effort decisions in the presence of customers' showrooming behaviour. We analyse how the availability of price-matching guarantees affects two product categories: 'non-showrooming' and 'showrooming'. Our findings show that price-matching strategy enhances the BM retailer's sales effort, the manufacturer's profit, and overall supply chain profitability for non-showrooming products, but is ineffective for showrooming products. For non-showrooming products, price-matching guarantee complements sales effort, with the manufacturer lowering its wholesale price to encourage more sales effort. For showrooming products, price-matching guarantees substitutes for sales effort, with the manufacturer's aggressive pricing discouraging sales efforts. Therefore, we recommend universally offering price-matching guarantees for non-showrooming products and restricting them to customer requests for showrooming products.

Keywords: showrooming; sales effort; Stackelberg game; strategic pricing.

DOI: 10.1504/IJMOR.2026.153577

International Journal of Mathematics in Operational Research, 2026 Vol.34 No.1, pp.119 - 136

Received: 13 Jun 2024
Accepted: 26 Jul 2024
Published online: 18 May 2026 *

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