E-Grocery Fulfillment Channels

Multiple major retail chains in Austria are offering an extensive range of groceries online. Additionally, numerous start-ups and companies, which specialize in grocery deliveries, are entering the market. Retail concepts differ substantially including traditional home deliveries, Click & Collect – also denoted as Bricks & Clicks – concepts and even personal shopping assistants. Through explorative interviews with grocery retail and logistics experts in Europe, Hübner et al. (2016)  investigate advantages and disadvantages of various e-grocery retail channels.

The authors differ between five main concepts in their study concerning last-mile distribution of ordered goods:

• Attended home delivery
• Unattended home delivery
• Click & Collect with in-store pickup
• Click & Collect with attached store pickup (see image)
• Click & Collect from a solitary station

Delivery times, velocity, time slots and the delivery area are identified as key factors which require close consideration to select distribution concepts. Furthermore, the importance of returns as well as company and customer-specific factors are discussed. The authors conclude that no ‘one-fit-all’ solution exists; each provider has to closely analyze its operational and market environment when designing e-grocery fulfilment channels.

This indicates a high need for simulation optimization methods and decision support systems in this field. A first work is presented in Waitz et al. (2018), which integrates customer preferences and shelf lives of various fresh fruits and vegetables. By enabling decision-makers to test and investigate different strategies in a risk-free software environment, innovative concepts can be tested  in respect to logistics costs and performance in various geographic settings. Furthermore, key influencing factors and interdependencies among these can be identified to facilitate successful e-grocery operations.

References:
Hübner, A., Kuhn, H., & Wollenburg, J. (2016). Last mile fulfilment and distribution in omni-channel grocery retailing: A strategic planning framework. International Journal of Retail & Distribution Management, 44(3), 228-247.

Waitz, M., Mild, A., & Fikar C. (2018) A Decision Support System for Efficient Last-Mile Distribution of Fresh Fruits and Vegetables as Part of E-Grocery Operations. Hawaii International Conference on System Sciences (HICSS-51) [Full Text]