Developing a theoretical framework of consumer logistics from a comprehensive literature review

Paper delivered at the 21st Logistics Research Network annual conference 2016, 7th-9th September 2016, Hull. Abstract Purpose: Logistics as a business discipline entered academic consciousness in the mid-1960s when work by marketing academics discussed the integration between marketing and logistics. However, the link with consumers in the point-of-origin to point-of-consumption typology was not explored until Granzin and Bahn’s conceptualisation and model of consumer logistics (CL) in 1989. Since then few contributions have followed and neglecting this aspect of logistics research is difficult to understand. Firstly, the consumer represents a productive resource as an important downstream supply chain member carrying out logistics activities and tasks. Secondly, logistics activities directed towards the consumer also act along a marketing axis, i.e. satisfaction and loyalty for an overall shopping experience both from transaction-specific and cumulative levels are influenced by product quality elements and service-related dimensions. This paper presents a theoretical framework for deeper research into the topic of CL. Research approach: A literature review was conducted first following philosophical or field conceptualization principles as a first step towards theory building. Data bases of major logistics and SCM journals were searched however the publication timeframe was not limited as the concept of CL is relatively new. Selection criteria and Boolean searches were conducted and keywords used within article abstracts and title fields of search. Due to a relative scarcity of contributions obtained by that approach and in-line with the principle of methodological triangulation, additional search strategies were applied using Google/ Google Scholar searches. The majority of the cited contributions were also cross-referenced and included in the analysis if appropriate. Findings and originality: The literature search yielded a mother population of 46 documents of which 24 have been considered relevant for further consideration. The document harvest was analysed using Granzin and Bahn’s original CL issues and additional features in order to explore, structure, articulate, orient, hierarchize and delimit the field of CL in the 21st century. Research impact: This paper updates Granzin and Bahn’s work to outline new and distinctive features of CL given the obvious changes in the retail landscape since their work 27 years ago, such as the Internet and omni-channel retailing. More broadly, conceptualizing CL in a holistic manner enhances SCM theory building by questioning traditional notions of time and space ranges, isolated marketing-merchandizing/logistics considerations, traditional understandings of sites /locations, and equipment (e.g. shopping cart or basket)/ infrastructure/ layout and buying stages that are in-line with external evolutions on organizational, technological and societal levels. Practical impact: Understanding and improving CL contributes to supply chain competitiveness via increased consumer satisfaction and loyalty, better order fulfilment via cost reductions and efficiency increases, and enhanced differentiation targeting consumers receptive for sustainability/ ethics/ mobility/ lifestyle/ life quality issues. A dedicated approach to CL also enhances management of repercussions and interactions with upstream/ B2B logistics, visible through retail stores being both a destination and a source for inventory, the rise of drop-ship vendor relationships and new fulfilment options and related infrastructure

A Secondary Packaging Solution Development Suitable for E-groceries through the Identification of Food Product and Logistic Requirements

Secondary packaging solutions presently used to package food goods in e-commerce supply chain are either taken from old supply chains, or sub-optimally developed in a non-holistic manner. Due to the increase use of the Internet in Europe to perform online food purchases, secondary packaging must be adapted to meet these new needs. Therefore, a secondary packaging solution for a Dutch e-grocer was devised through a case study and the identification of food product and logistic requirements for such a packaging. Identified requirements were found to be fulfilled by the use of packaging features. Food product requirements that have to be considered during the development of a secondary packaging for food in e-commerce benefit product quality assurance. These requirements are the control of temperature over time, the reduction of product damage and the separation of food product types. Logistics requirements that must be considered for secondary packaging solutions for food in e-commerce relate to last mile logistics. This entails fulfilment, transportation, delivery and return-logistics. Applying these results during the secondary packaging solution development for the case study resulted in the finding of suitable value-adding packaging features to address the above mentioned requirements. Separators in the secondary packaging facilitate eased fulfilment, increase the stackability of packaging, as it provides a larger surface area on which more crates can be stacked. Increased stackability influences volume efficiency and reduces the need for extra packaging levels. Time temperature indicators increase quality assurance and a deposit-refund system can induce incentive for customers to return the used packaging levels

E-grocery logistics: exploring the gap between research and practice

Purpose: This paper investigates the logistics management in the e-grocery sector. It contrasts the key issues faced by practitioners and the topics addressed in the academic literature, to identify potential misalignments between research and practice and propose avenues for future efforts. Design/methodology/approach: This work adopts a twofold methodological approach. From an academic perspective, a systematic literature review (SLR) is performed to define the topics addressed so far by scholars when analysing e-grocery logistics. From a managerial perspective, a Delphi study is accomplished to identify the most significant issues faced by logistics practitioners in the e-grocery context and the associated significance. Findings: The study develops a conceptual framework, identifying and mapping the 9 main logistics challenges for e-grocery along 4 clusters, in the light of a logistics-related revision of the SCOR model: distribution network design (area to be served, infrastructures), order fulfilment process (picking, order storage, consolidation, delivery), logistics-related choices from other domains (product range, stock-out management) and automation. These elements are discussed along three dimensions: criticalities, basic and advanced/automation-based solutions. Finally, the main gaps are identified – in terms of both under-investigated topics (order storage and stock-out management) and investigated topics needing further research (picking and automation) – and research questions and hypotheses are outlined. Originality/value: This paper provides a threefold contribution, revolving around the developed framework. First, it investigates the state of the art about e-grocery logistics, classifying the addressed themes. Second, it explores the main issues e-grocery introduces for logistics practitioners. Third, it contrasts the two outcomes, identifying the misalignment between research and practice, and accordingly, proposing research directions

Challenges and opportunities of e-fulfilment operations in the Gulf Cooperation Council

Electronic commerce (EC) in scholarship and practice has been richly discussed. Consumers’ fulfilment is considered a potential factor for firms. EC involves different processes, from inbound to outbound, which have to maintain consistency of flow within the booming e-commerce market. As a result, the variety of tools employed has increased, such as omnichannel marketing and the use of smart phones. Logistics is considered one of the major stages that can support the process of EC and achieve consumers’ fulfilment. This thesis explores the issues of electronic commerce fulfilment (ECF) in the five Gulf Cooperation Council (GCC) countries.The extent of ECF in the GCC online market is little known, as is how logistics activities operate, how ECF models are assembled and why. Whether or not logistics activity is considered in a firm’s strategy also remains a question for research. Therefore, this thesis investigates pure-player (PP) and multichannel (MC) firms and involves logistics service providers (LSPs) in the five GCC countries. A wide range of consumers from small and large cities across the five countries also contributed to obtaining information required to achieve the study’s objective and contribute to knowledge. This study adopted a qualitative and inductive approach in using semi-structured interviews to collect data. Fifty-three participants (owners, managers, logistics managers, and consumers) were interviewed to provide an objective study aimed at making e-commerce better and more efficient.This study finds logistics models are not considered a priority in a firm’s strategy plan and cultural factors greatly affect e-fulfilment, such as when using another language during communication and delivery processes. Communication between firms and providers is also considered to be unclear. Furthermore, the business-to-consumer (B2C) segment is still not a target for most LSPs. Hence, policy plays an essential role, such as in banning the entry of lorries to a city or applying employment conditions when hiring citizen drivers, and has an effect on ECF. Mistrust emerged as a factor in the limited options for payment. For example, the cash on delivery (COD) method is strongly preferred by most consumers. Innovative solutions have not been provided as required by global LSPs, particularly in the cultural context, although some provision has been made, such as in the case of women not being allowed to drive in Saudi Arabia with imprecise postal system and delivery needs to be pre-arranged. Telephone numbers and shipment tracking are still not clear for firms and consumers, as telephone numbers are often incorrect, telephones are not answered and tracking is not available or is imprecise. As a result, the findings reveal eight themes grouped into three categories: logistics activity, purchasing methods and cultural effects and also proposes new models for ECF

An exploration of online fulfilment centres in omni-channel grocery retail

Grocery retail is going through a rapid shift and retailers are moving towards omni-channel. Omni-channel means that a retailer has multiple channels in which thecustomer can move seamlessly, with the back-end organised to make this possible.While the grocery-retail sector has started to see a rapid growth in online sales,omni-channel grocery retailers are struggling with profitability in their onlinechannels. For these retailers, efficient logistics and material handling are crucial toachieve profitability. Today, it is common for omni-channel grocery retailers toinvest in an online fulfilment centre (OFC) when volumes are growing. A keycomponent for improving profitability is thus to improve the OFC configuration (i.e.warehouse operations, design, and resource). Despite the important role that an OFCplays for omni-channel performance and profitability, extant research is lacking onhow to configure an OFC in omni-channel grocery retail. Hence, the purpose of thisthesis was to ‘explore how grocery retailers are configuring their OFCs and in whatway they adapt to specific challenges and context’

Online grocery shopping In Portugal: how store-based businesses can adapt to win

This paper examines the current state of online grocery shopping in Portugal, in order to help existing store-based grocers provide the best online offer that they can. Review on existing studies and an analysis of customer preferences in Portugal helped understand that Price and Convenience are the key factors to win in the online grocery channel. Given the early stage of adoption of this service, this means that retailers have improvement opportunities through which they can adapt their offers and increase sales, especially in what concerns order fulfilment

Comparative Analysis of Energy Intensity and Profitability in Emerging E-Grocery Retail Models

The supermarkets account for approximately 3% - 4% of the electricity consumption in the industrialised countries which makes them one of the main contributors to climate change. Food retail, similarly to other energy intensive industries requires deep changes that would reduce its negative environmental footprint. Online grocery (e-grocery), recording three-digit growth globally in the times of COVID-19 pandemic, has the potential to disrupt the market and bring opportunities for energy intensity reduction. Brick & mortar retailers adapting to this trend not only experience technical challenges with order fulfilment and last-mile logistics, but also they struggle to achieve profitability of e-grocery. Therefore, there is a need for guidance in this transformation. This thesis aims to help retailers choose the least energy intensive and profitable e-grocery configuration by comparing the emerging fulfilment models (in-store, omni store, dark store) and last-mile delivery options (click & collect, home delivery). The scope of this thesis includes a literature and market review, where an overview of e-grocery market, logistics, technologies, energy intensity and economics is given. The review is followed by methodology explaining the tools and assumptions used for analyses. Then, energy intensity analysis is performed where energy intensity per order is calculated using CyberMart software for three fulfilment models and two delivery options. After that, the operating costs and profitability of e-grocery models is analysed. Finally, the results from analyses are discussed, concluded and recommendations for the retailers are given. The results of this thesis suggest that e-grocery may indeed reduce energy intensity of food retail but the energy consumption has little impact on the operational costs of the e-grocers. Labour fulfilment and order delivery costs optimisation play the biggest role in achieving profitability of online retail. Thus, it is recommended that the retailers, along with the growing penetration of e-grocery, develop automated fulfilment and click & collect solutions that would reduce the operational costs and allow for an incremental, yet future-proof adaptation to the e-grocery revolutionStormarknaderna står för cirka 3% - 4% av elförbrukningen i de industrialiserade länderna, vilket gör dem till en av de främsta orsakerna till klimatförändringarna. Livsmedelsbutiker kräver, på liknande sätt som andra energikrävande industrier, stora förändringar som kan minska dess negativa miljöpåverkan. E-handel av livsmedel, som har registrerat tresiffrig tillväxt globalt under tiderna för COVID-19-pandemin, har potential att störa marknaden och ge möjligheter till minskning av energiintensitet. Traditionell verksamhet som anpassar sig till denna trend upplever inte bara tekniska utmaningar med orderhantering och leverans till slutkund, utan de kämpar också för att uppnå lönsamhet. Därför finns det behov av vägledning i denna omvandling. Denna avhandling syftar till att hjälpa återförsäljare att välja de minst energikrävande och lönsamma alternativen för e-handel av livsmedel genom att jämföra de nya modellerna för orderhantering (in-store, omni store, dark store) och leveransalternativ till slutkund (click & collect, hemleverans). Avhandlingen omfattar en litteratur- och marknadsstudie, där en överblick ges över e-handel av livsmedel, logistik, teknik, energiintensitet och ekonomi. Studien följs av ett avsnitt om metodik som förklarar verktyg och antaganden som används för analysen. Därefter utförs en analys av energiintensitet där energiintensitet per order beräknas med hjälp av programvaran CyberMart för tre modeller för orderhantering och två leveransalternativ. Därefter analyseras driftskostnaderna och lönsamheten för modeller för e-handel av livsmedel. Slutligen diskuteras resultaten från analyserna och rekommendationerna till detaljhandlarna presenteras. Resultaten av denna avhandling tyder på att e-handel av livsmedel verkligen kan minska energianvändningen i livsmedelsindustrin men energiförbrukningen har liten inverkan på driftskostnaderna för e-handlarna. Att optimera arbetet för orderhantering och kostnaden för leverans spelar störst roll för att uppnå lönsamhet för e-handeln. Det rekommenderas därför att detaljhandlarna, tillsammans med den växande andelen av e-handel, utvecklar automatiserad lösningar för orderhantering och click & collect som skulle minska driftskostnaderna och möjliggöra en stegvis, men ändå framtidssäker anpassning till e-handeln av livsmede

A Decision Support System for Efficient Last-Mile Distribution of Fresh Fruits and Vegetables as Part of E-Grocery Operations

Efficient last-mile distribution of fresh fruits and vegetables is a major challenge within e-grocery operations. This work presents a decision support system to jointly investigate the impact of various service offers on customer preferences and logistics operations. Results from a conjoint analysis surveying 531 end consumer are incorporated within an agent-based simulation. Delivery days, fees, time windows and discounts as well as guaranteed remaining shelf life of products at delivery are considered. To model shelf life and schedule deliveries, food quality models and vehicle routing procedures are further integrated within the system. Based on an e-grocery provider operating in Vienna, Austria, computational experiments investigate the impact of the offered delivery service on fulfilled demand, order volume and customer utility. Results indicate the importance of incorporating shelf life data within e-grocery operations and various potentials of considering customer preferences in logistics decision support systems

Using Transaction Utility Approach for Retail Format Decision

Transaction Utility theory was propounded by Thaler to explain that the value derived by a customer from an exchange consists of two drivers: Acquisition Utilities and Transaction utilities. Acquisition utility represents the economic gain or loss from the transaction. Where as transaction utility is associated with purchase or (sale) and represents the pleasure (or displeasure) of the financial deal per se and is a function of the difference between the selling price and the reference price. Choice of a format has been studied from several dimensions including the cost and effort as well as the non-monetary values. However, the studies that present the complete picture and combine the aspects of the tangible as well as intangible values derived out of the shopping process are limited. Most of the studies, all of them from the developed economies, have focussed on the selection of a store. They represent a scenario where formats have stabilised. However, in Indian scenario formats have been found to be influencing the choice of store as well as orientation of the shoppers. Also, retailers are experimenting with alternate format with differing success rates. The author has also not found a study that has applied this theory. It is felt that the Transactional Utility Theory may provide a suitable approach for making format decisions.