Execution of Omni-Channel Retailing Based on a Practical Order Fulfillment Policy

Abstract

With the rapid development of the retail industry and its transition to omni-channel, a critical challenge that how to fulfill customer orders by choosing the proper channels arises for the retailers. In omni-channel retailing, customers can make a purchase online or offline, and the online customers are offered the options of home delivery or collection at a specified store, delivering immediately or during an appointed time window, and accepting split delivery or not. For the effective execution of omni-channel retailing in such a circumstance, this paper proposes an intuitive order fulfillment policy, aiming to gain lower service cost and higher customer satisfaction, as a reference for the retailers’ operation management. Via experimental analyses under various service costs and demand forecasts, their influences on channel selection and the policy performance are illustrated. Furthermore, the comparison of the performances of the omni-channel with independent channels quantitatively reveals one crucial reason for the surge of omni-channel.