Abstract
Inspired by recent innovations in the retail industry, we study an on-demand personal shopper service that lets customers shop online for products from brick and mortar stores. A fleet of personal shoppers fulfills customer orders, performing both shopping at the stores and delivery to the customers. The operation of such a service requires to dynamically offer service to incoming shopping and delivery requests, coordinate a fleet of shoppers, schedule shopping operations at stores, and execute deliveries to customers on time. This paper studies this new problem and proposes three different order-consolidation strategies for service operators. Our numerical results show that order consolidation, particularly shopping consolidation, can significantly increase the number of served orders by better using the available shopper capacity. We observe that splitting orders can further enhance the performance of the system. The results also suggest that personal shopper services increase time utilization and execute shopping activities using significantly less human resources than customers shopping for themselves.
Highlights
Online retailers continuously seek faster delivery services to satisfy the customers’ need for instant gratification
These services are increasingly popular in the delivery of groceries and convenience goods, since they integrate the comfort of online shopping with product assortment at brick and mortar stores
The Personal Shopper Problem (PSP) is related to the vast family of Pick-up and Delivery Problems (PDP), that involve designing cost-efficient routes to serve a set of transport requests, each with a specific origin and destination (Savelsbergh and Sol, 1995)
Summary
Online retailers continuously seek faster delivery services to satisfy the customers’ need for instant gratification. In personal shopper operations there is typically more time and route flexibility as compared to the delivery of fresh meals Another difference is that the personal shopper may have to visit multiple retail stores to serve a single customer. We introduce the Personal Shopper Problem (PSP), which models an online shopping service dynamically receiving and serving on-demand shopping and delivery requests. (i) We are the first to study a new service model in which personal shoppers shop for lists of goods at local stores for delivery to the customer. It differs from other same-day delivery systems, since it vertically integrates product fulfillment (shopping) and order distribution activities in one person.
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