Retail logistics in the transition from multi-channel to omni-channel

Abstract

Purpose – Online retailing changes all retail systems significantly. The growing importance of online sales requires the creation of new fulfillment models. The purpose of this paper is to investigate how retailers develop from separate multi-channel (MC) to integrated omni-channel (OC) fulfillment. OC retailing has an integrated perspective, with seamless interactions between online and bricks-and-mortar channels. Design/methodology/approach – More than 60 internationally active retailers and experts from Germany participated in an exploratory survey. With a response rate of 40 percent the authors achieved the goal to adequately depict the German MC and OC retail market. It is currently the largest empirical study of MC and OC fulfillment. Findings – It is the first study to comprehensively analyze the logistical development options open to retailers for integrated fulfillment. The authors discuss the conceptual development options and formulate propositions for an advanced OC fulfillment approach. OC retailers aim to pool their organizational units for fulfillment via different channels. Retailers with multiple channels develop their warehouse systems toward channel-integrated inventory enabling flexible and demand-driven inventory allocation. Retailers with channel-integrated inventory also organize their picking procedures in one common zone. The higher the outlet density, the more it becomes beneficial for retailers to introduce pick-up services. Research limitations/implications – The research is based on insights from retailers and experts from companies based in Germany. Practical implications – The findings provide an insight into designing OC fulfillment and distribution structures. The concepts themselves, archetypes, challenges and development paths are analyzed. Identified logistics levers can be adjusted to pinpoint the steps required to advance integration. Originality/value – The authors contribute by deriving propositions and a framework for transitioning from basic MC to integrated, extended OC logistics. Because this research area is still comparatively young, the authors take a more comprehensive, exploratory view of OC fulfillment.

Distribution systems in omni-channel retailing

“…Because we want to get the broadest possible view of the logistics systems relevant in practice, we refer to distribution in multiple channels as ''omni-channel'' distribution, since this is the overarching term and most advanced concept (Beck and Rygl 2015;Hübner et al 2016a;Verhoef et al 2015). Consequently, we investigate the structures and processes needed for OC distribution, where retailers aim to integrate operations and physical product flows to provide a seamless shopping experience (Brynjolfsson et al 2013;Beck and Rygl 2015).…”

“…To streamline distribution issues, we focus on non-food distribution, which differs fundamentally from food distribution in terms of its requirements (e.g., Kuhn and Sternbeck 2013;Hübner et al 2013bor Hübner et al 2016a. Nowadays nonfood is still the main sector for OC concepts (Forrester 2014).…”

Tell me what they are like and I will tell you where they buy. An analysis of omnichannel consumer behavior

“…Last year, 49% of in-store sales in the U.S. were influenced by digital devices (online and mobile) used before or during shopping trips, which involved $1.7 trillion (Deloitte, 2015). In this aspect, academic literature has focused mainly on online and offline channel choice for each decision-making stage (Dholakia, Kahn, Reeves, Rindfleisch, Steward, & Taylor, 2010;Hübner, Wollenburg, & Holzapfel, 2016;Verhoef, Kannan, & Inman, 2015). Yet, as technology advances, consumers are using an increasingly wider range of devices such as smartphones and tablets in addition to computers.…”

Omni-channel logistics special issue

“…These papers build on a recent special issue on "Retail Logistics" edited by Mena and Bourlakis in 2016. In that special issue, relevant omni-channel-related work was published (see Bernon et al, 2016;Hübner et al, 2016;Ishfaq et al, 2016) and provided the foundation (and inspiration!) for the current special issue.…”