Abstract
AbstractThe growing importance of online sales means that traditional bricks-and-mortar retailers need to create new distribution systems to serve customers through multiple channels. Building an effective and efficient omni-channel (OC) distribution system, however, leads to multiple challenges. The questions arise for example, from where online orders should be fulfilled, how delivery and return processes can be organized, and which context-specific OC distribution systems exist. Answering these questions retail research and practice require an overall view of the distribution concepts for direct-to-customer and store deliveries in OC retailing, including the associated return processes. This overall picture is still missing in the literature. We conducted an exploratory study to close this observable gap in the literature. This exploratory study is based on semi-structured interviews with major OC retailers in German-speaking countries and was complemented by market data research and discussions with further experts in the field of OC retailing. Based on the results of the study, the forward distribution system in OC retailing is characterized by the sources (supplier DCs, retailer DCs, stores) and destinations (home, store) which describe the options for store delivery, home delivery, and store pickup. Return processes are likewise characterized by the sources (store, home) and destinations (store, DC, return center). This framework forms the foundation for analyzing contextual criteria, identifying when the different conceptual designs are applied, determining industry-specific characteristics, and illustrating ways to further advance OC retailing. The present paper, therefore, contributes to the literature in three main areas: (1) it identifies and systematizes the forward and backward concepts in OC retailing, (2) it reveals application and development areas for achieving excellence in OC fulfillment and logistics, and (3) shows the need for developing sector- and context-specific OC distribution systems.
Highlights
The share of online sales in retail is growing globally (Biggs and Suhren 2013; Forrester 2014)
Based on the results of the study, the forward distribution system in OC retailing is characterized by the sources and destinations which describe the options for store delivery, home delivery, and store pickup
This OC revolution was triggered by the recent reaction of bricks-and-mortar retailers to the new service offers from pure online retailers (Banker and Cooke 2013)
Summary
The share of online sales in retail is growing globally (Biggs and Suhren 2013; Forrester 2014) It is driven by an increase in sales in existing online channels, as well as by the ongoing market entry of bricks-and-mortar retailers into e-commerce. As retailing develops towards a seamless omni-channel (OC) shopping experience, the distinctions between physical bricks-and-mortar stores and webshops will vanish (Brynjolfsson et al 2013). This OC revolution was triggered by the recent reaction of bricks-and-mortar retailers to the new service offers from pure online retailers (Banker and Cooke 2013). Distance retailers, such as pure online players, are establishing physical stores to expand their service offerings (PwC 2013; Verhoef et al 2015)
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