Identifying a Selection Mechanism of Distribution Channel for the Supply Chain: the Barriers to the Application of Web 3.0

The application of Web 3.0 will bring unprecedented changes to the supply chain, where many industries are seeing significant cost reductions. However, due to the requirement of stability for supply chain, sometimes the total cost of supply chain cannot decrease effectively under Web 2.0, which may hinder the application of Web 3.0. Following the application from Web 2.0 to Web 3.0, this paper discusses the selection of distribution channel whose cost is under user stickiness and the degree of digitalization.The system optimum model, which is commonly used in dynamic traffic allocation, is applied to solve the distribution channel selection problem. The results implies that when the degree of digitalization is low, the distribution channel cost first decreases and then increases as user stickiness increases. This trend of channel cost illustrates the price induction on user stickiness initially, and gradually adjust the price to be higher when user stickiness makes channel transformation costly. Customers with unclear user stickiness perceptions and weak channel control can easily be trapped in the transition from Web 2.0 to Web 3.0. Distributors will also be forced to accept high product costs due to the price induction from product distribution channels.