Impact of artificial intelligence adoption on online returns policies

Yang, Guangyong; Ji, Guojun; Tan, Kim Hua

Abstract

The shift to e-commerce has led to an astonishing increase in online sales for retailers. However, the number of returns made on online purchases is also increasing and have a profound impact on retailers’ operations and profit. Hence, retailers need to balance between minimizing and allowing product returns. This study examines an offline showroom versus an artificial intelligence (AI) online virtual-reality webroom and how the settings affect customers’ purchase and retailers’ return decisions. A case study is used to illustrate the AI application. Our results show that adopting artificial intelligence helps sellers to make better returns policies, maximize reselling returns, and reduce the risks of leftovers and shortages. Our findings unlock the potential of artificial intelligence applications in retail operations and should interest practitioners and researchers in online retailing, especially those concerned with online returns policies and the consumer personalized service experience.

Citation

Yang, G., Ji, G., & Tan, K. H. (2022). Impact of artificial intelligence adoption on online returns policies. Annals of Operations Research, 308(1-2), 703–726. https://doi.org/10.1007/s10479-020-03602-y

• Journal Article Type: Article
• Acceptance Date: Mar 27, 2020
• Online Publication Date: Apr 10, 2020
• Publication Date: 2022-01
• Deposit Date: Apr 20, 2020
• Publicly Available Date: Apr 20, 2020
• Journal: Annals of Operations Research
• Print ISSN: 0254-5330
• Electronic ISSN: 1572-9338
• Publisher: Springer Verlag
• Peer Reviewed: Peer Reviewed
• Volume: 308
• Issue: 1-2
• Pages: 703–726
• DOI: https://doi.org/10.1007/s10479-020-03602-y
• Keywords: Management Science and Operations Research; General Decision Sciences
• Public URL: https://nottingham-repository.worktribe.com/output/4315765
• Publisher URL: https://link.springer.com/article/10.1007%2Fs10479-020-03602-y