Channel Fulfillment Characteristics, Retail Network Structure and Buy-online-shipfrom-store Performance PDF Download

Author: Daniel Fritzen Taylor
Publisher:
ISBN:
Category : Industrial management
Languages : en
Pages : 179

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Book Description
Buy-online-ship-from-store (BOSS) is a relatively new and increasingly popular omnichannel fulfillment strategy for retailers. Shipping from stores allows retailers the capability to offer in-store inventory to online customers. The combined inventory available in stores and their locations closer to the customer make them attractive for online direct-to-consumer order fulfillment. In three essays, we identify statistical-economies-of-scale benefits from this pooling technique across asymmetrical retail channels. Working with a retailer, we detect ship-from-store contributed store stockouts. We also examine consumer behavior in response to stockouts according to the channel of intended purchase. In the first study we use chance constrained analytical models and Monte Carlo simulation to demonstrate the distinctly different inventory pooling behavior caused network-wide when implementing buy-online-ship-from-store. The asymmetrical availability of inventory to online customers versus in-store customers allows for unique to omnichannel captive inventories within stores. When online demand is strong enough, all safety stocks can be redirected to online customers. Otherwise, safety stocks can remain stagnant in the stores. In our second study, we partner with an apparel retailer and distinguish the counter-phenomenon observed in essay one. We observe stores unevenly stocking out when contributing to online demand fulfillment. Using panel data from the 2016 holiday season, we utilize store-based fixed-effects models to show that assigning stores to fulfill local online demand where both channels have strong sales leads to uneven store stockouts across the network. By utilizing consumer experiments, our third study demonstrates that in-store customers are more likely to remain with the retailer and substitute for out-of-stock products. Online customers are more likely to leave the retailer to seek their exact desired product elsewhere. Mitigating strategies for the retailer are additionally examined. We recognize that BOSS can make more inventory available for online customers. Each essay expands the theoretical understanding of omnichannel fulfillment management. Buy-online-ship-from-store is currently being applied by many retailers. Our research is directly applicable in practice. We propose paths to expand the work we have contributed. This dissertation expands our understanding of inventory and stockout behavior regarding omnichannel fulfillment and its impact on retailers and consumers.