Abstract: This paper considers a two-level supply chain system composed of a manufacturer and a retailer, in which the manufacturer can sell products to the retailer by using the traditional wholesale (WS) contract or fulfill online orders of the retailer by using the drop-shipping (DS) contract, and the retailer can sell products to customers through the online channel or the “buy online and pick up in store” (BOPS) channel. In this context, the relationship between contract choices of the manufacturer and channel integration of the retailer is studied. Firstly, a two-dimensional dynamic game system with the bounded rational manufacturer and retailer as game subjects is established by using the Stackelberg game model with manufacturers as the main player and retailers as the follower to maximize their respective profits. Secondly, the evolutionary game theory is used to analyze the dynamic evolutionary process of strategy selection by two parties in the game, and obtain the evolutionary stable strategies under different scenarios. Finally, the numerical experiment is implemented to verify the validity of the proposed model. The results show that the profits of the manufacturer and retailer decrease with the increase of customers’ waiting cost; the profit of the manufacturer decreases with the increase of the profit sharing rate, and the profit of the retailer decreases with the increase of BOPS convenience coefficient. Further, when the customers’ waiting cost and BOPS convenience coefficient are both too high, the manufacturer tends to adopt the WS contract strategy; On the contrary, the manufacturer tends to adopt the DS contract. When the customers’ waiting cost is low or the profit sharing rate is high, the retailer prefers to adopt the online retail strategy; when the customers’ waiting cost is too high or the profit sharing rate is low, the retailer prefers to adopt the omnichannel retail strategy (Online + BOPS).

Key words: omnichannel retailing, BOPS channel, contract choice, Stackelberg game, evolutionary game