BALTIMORE, Oct. 12, 2026 — A peer-reviewed study in the INFORMS journal Marketing Science revealed that direct competitors in retail, online and offline firms, can both benefit by working together when it comes to handling product returns. The research shows that “buy online, return in store” (BORS) partnerships, such as those between Amazon and Kohl’s, can impact competition in a way that benefits both companies. At the same time, consumers can also be better off under some circumstances, leading to a win-win-win scenario for all players.
The study called, “Bricks Processing Returns for Clicks: Can Foes Become Friends?,” was authored by Ahmed Timoumi and Abhinav Uppal, both of the Indian School of Business.
The researchers found that BORS agreements can actually transform rival retailers into strategic partners. Thanks to the agreement, the online seller is able to make its customers’ return process easier. For its part, the bricks-and-mortar store is able to attract new foot traffic from people who may not routinely shop at that store, which that can translate into sales. However, these forces alone do not paint the entire picture as there are more nuanced strategic forces at play.
“The study has highlighted two key competitive forces at play,” said Timoumi. “The return-flexibility effect makes online shopping more attractive by lowering customers’ return hassle, which can intensify competition for offline retailers. At the same time, the competition-alleviation effect emerges when online retailers relinquish returners to the offline partner, easing head-to-head rivalry and allowing both sides to maintain higher prices.”
The result, the authors find, can be a win-win-win outcome for online retailers, offline retailers and consumers.
To conduct their study, the researchers used a formal game-theory model of price competition between an e-commerce platform and a traditional retailer, the study found that while these partnerships can initially create pressure for the bricks-and-mortar stores to lower prices, they can actually soften price competition overall and lead to higher profits for both firms when their brands are moderately differentiated.
“BORS agreements play a powerful strategic role for both online and offline retailers,” said Uppal. “Our research reveals that the agreement can also actively curb customers’ incentive to engage in showrooming behavior, a phenomenon where shoppers freeride on the offline retailer’s presales service before purchasing online, usually at a lower price. In this way, BORS agreements can help offline retailers manage the online threat not only by softening price competition but also by serving as a strategic tool against showrooming.”
The findings suggest that retailers should consider BORS agreements when their brands are moderately differentiated, when online return rates are moderate, and when consumers face relatively high purchasing costs for the items.
Read the full study here.
About Marketing Science and INFORMS
Marketing Science is a premier peer-reviewed scholarly marketing journal focused on quantitative research examining all aspects of consumer-firm interaction. It is published by INFORMS, the world’s largest association for professionals and students in operations research, AI, analytics, and data science.
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