Best Performance Frontiers for Buy-Online-Pickup-in-Store order fulfilment

Abstract

Buy-Online-Pickup-in-Store (BOPS) retail services have gained increasing popularity as they offer benefits for both customers and retailers in omni-channel retailing. However, using conventional retail stores to fulfil orders received online whilst also serving walk-in customers is challenging for retailers, particularly when a high customer service level is promised to online customers (e.g., order by a certain time and pick up in store after a specific time later the same day). We examine store picking operations for same day BOPS services. Specifically, we derive Best Performance Frontiers (BPFs) for single wave and multi-wave in-store order picking. New relationships, propositions, and results are developed to determine the minimum picking rate needed in stores to guarantee a target service level, the number of picking waves a retailer should launch in an ordering cycle, and the timing of picking waves. We also examine demand surge scenarios with different order arrival rates in an ordering cycle. Insights from, and implications of the results are discussed for retailers that seek to benchmark their current BOPS performances and understand how to schedule and improve the picking of online orders in conventional retail stores and the picking rates needed to guarantee a desired service level for online customers.