The optimal combination between blockchain and sales format in an internet platform-based closed-loop supply chain

Inspired by the practice of platform retailers cooperates with blockchain technology service providers to improve the recycling rate of waste products and solve the three bottleneck problems of recycling, this paper examines how the platform should optimize the combination of blockchain & sales format to improve the economic, social and environmental (ESS) performance of the closed-loop supply chain (CLSC). Through analytical models, three major effects of blockchain are revealed, namely brand premium effect, forward and backward attraction effect, and optimal combined effect. Besides, intuition suggests that the retail price decreases with increasing of consumer sensitivity to reference price effects, this result occurs in cases where reference price effects dominate demand. When the brand effect dominates demand, the counterintuitive result emerges that firms can raise the retail price with increased sensitivity. The implementation of blockchain will amplify the changes through brand premium effect in two corresponding cases. Another interesting finding is that only when the commission rate is extremely low/relatively high, the CLSC member can reach a stable cooperation relationship with the platform selling/agency selling. At the same time, the optimal blockchain & sales format of the platform that can achieve the triple benefits of EES in the CLSC is clarified. Furthermore, combined with the platform sales cases of different categories of products, this paper derives the blockchain & sales format combination strategy of platform enterprises for the universality of different attribute products.

Automated summary

This paper explores how platforms could improve the economic, social, and environmental performance of closed-loop supply chains (CLSC) by optimizing the combination of blockchain and sales format. Through analytical models, the study reveals three major effects of blockchain: brand premium effect, forward and backward attraction effect, and optimal combined effect. The research also finds that retail price decreases with increasing consumer sensitivity to reference price, except when the brand effect dominates demand. The implementation of blockchain amplifies the brand premium effect. Furthermore, the study identifies the optimal blockchain and sales format for platforms to achieve the triple benefits of EES in CLSC.