Considering the effect of a dominated manufacturer selling its products through a brick-and-mortar shop and its own online channel, this paper develops a non-cooperative game model to examine how the reference price effect affects the online retail price and traditional retail price, and designs a contract to coordinate the whole supply chain. The results show that, compared with the centralized setting, the profit of the whole supply chain decreases under the decentralized setting. The reference price effect can reduce channel price conflict, and improve the operation efficiency of supply chain. Finally, a well-designed two-part tariff contract can coordinate the dual-channel supply chain perfectly.