Facility selection model for BOPS service for an omni-channel retail chain

Abstract

Retail sector around the world is going through a transition due to digitalization. Customers now demand convenience of online channel with instant fulfilment of offline channel. As a result, the concept of omni-channel retailing has come into existence. In omni-channel retailing, both the channels of a firm are fully or partially integrated. There are many strategies that may be developed by retailers for efficient functioning of the omni-channel retail chain. The choice of such a strategy depends upon the comparative benefits that can be derived from them. One such strategy gaining immense attention of retailers is the Buy Online Pickup in Store (BOPS) strategy. In order to understand this BOPS, we conducted a detail case study of an Indian multi-channel retail chain who is considering the option of launching BOPS option in few of its retail stores. The focus is to evaluate and select a fixed number of operational retail stores to also act as pick-up points for online deliveries. K-means clustering is utilized for formation of retail zones as per the number of retail stores to be selected. The retail stores in each zone are evaluated on the basis of a number of criteria such as demand, inventory carrying capacity, cost, and population characteristics using Analytical Hierarchy Process (AHP) and Complex Proportional Assessment-Grey (COPRAS-G). Based on these evaluations the best suitable retail store is selected for expansion from each zone. The result implications drawn in the study can provide an understanding of the future strategies that can be developed by the decision makers of the firm for launching the BOPS option. The study can also be beneficial to other Indian retail firms who can derive meaningful insights from the findings