Research Retail is detail – also in supply chain management
Researcher: Sander de Leeuw
These days, online retailers offer a variety of delivery methods and shipping fee policies to consumers for their online orders. Many retailers compete on offering new delivery options, such as same-day delivery, the ability to select a time slot when placing an order or providing memberships that allow free delivery.
However, relatively little is known about how the offering of such delivery attributes affects consumer choice and ultimately attracts new customers. In addition, it is unclear how retailers can best attune their supply chain strategies to these requirements. To this end, we have started with a variety of empirical research projects that all show the same effect: consumers make decisions with their wallet in mind! Delivery fees dominate choices for delivery options, implying that consumers aim to select the cheapest delivery options. Retailers can use this to steer consumers towards their own preferred options. Retailers may thus offer free delivery of an online order to a retailer store (and paid delivery to a home address), because several cases have shown that consumers buy additional items while in-store to pick up their online order.
Online retail operations are a focal area of the Logistics research group. TKI Dinalog has sponsored a four year research project in this domain and last June, Dr Dung Nguyen defended his Ph.D.-thesis on this topic. Research in this area will continue on how consumers make decisions for delivery options using amongst others retail transaction data. In parallel, we investigate how to design retail supply chain strategies accordingly. This includes for example deciding from which inventory location to fulfil online orders (e.g. from stores or distribution centers).