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How to serve online consumers in rural markets: Evidence-based recommendations

Author

Listed:
  • Sousa, Rui
  • Horta, Carolina
  • Ribeiro, Ricardo
  • Rabinovich, Elliot

Abstract

Online shopping is growing significantly among rural consumers interested in overcoming product assortment limitations in their local markets. Retailers are taking notice, and some are looking for first-mover-advantage opportunities in rural areas where they see greater potential for growth when compared to saturated urban markets. However, expanding to these areas presents significant and unresolved challenges related to last mile fulfillment caused by low levels of population density as well as other socioeconomic and demographic characteristics. In this article, we present an integrated set of recommendations for online retailers to differentiate strategies to serve rural markets efficiently. To that end, we partnered with an online grocery retailer to examine differences between rural and urban consumers across online shopping preferences that significantly impact fulfillment costs. We draw on those differences and existing knowledge on last mile fulfillment operations to propose a tailored consumer value proposition and operational model for last mile fulfillment in rural markets.

Suggested Citation

  • Sousa, Rui & Horta, Carolina & Ribeiro, Ricardo & Rabinovich, Elliot, 2020. "How to serve online consumers in rural markets: Evidence-based recommendations," Business Horizons, Elsevier, vol. 63(3), pages 351-362.
    • Handle: RePEc:eee:bushor:v:63:y:2020:i:3:p:351-362
    DOI: 10.1016/j.bushor.2020.01.007
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    1. Neeraj Arora & Xavier Dreze & Anindya Ghose & James Hess & Raghuram Iyengar & Bing Jing & Yogesh Joshi & V. Kumar & Nicholas Lurie & Scott Neslin & S. Sajeesh & Meng Su & Niladri Syam & Jacquelyn Thom, 2008. "Putting one-to-one marketing to work: Personalization, customization, and choice," Marketing Letters, Springer, vol. 19(3), pages 305-321, December.
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    2. Lijuan Huang & Guojie Xie & Raoyi Huang & Guokai Li & Weiwei Cai & Chrysostomos Apostolidis, 2021. "Electronic Commerce for Sustainable Rural Development: Exploring the Factors Influencing BoPs’ Entrepreneurial Intention," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
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    6. Indrajit Ghosal & Bikram Prasad & Mukti Prakash Behera & Atul Kumar, 2021. "Depicting the Prototype Change in Rural Consumer Behaviour: An Empirical Survey on Online Purchase Intention," Paradigm, , vol. 25(2), pages 161-180, December.
    7. Fabusuyi, Tayo & Twumasi-Boakye, Richard & Broaddus, Andrea & Fishelson, James & Hampshire, Robert Cornelius, 2020. "Estimating small area demand for online package delivery," Journal of Transport Geography, Elsevier, vol. 88(C).
    8. Samani, Ali Riahi & Talebian, Ahmadreza & Mishra, Sabyasachee & Golias, Mihalis, 2025. "Evaluating consumer shopping, delivery demands, and last-mile preferences: An integrated MDCEV-HCM approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 197(C).
    9. Melanie Burian & Charlotte Köhler & Ann Melissa Campbell & Jan Fabian Ehmke, 2024. "Service time window selection for attended home deliveries: a case study for urban and rural areas," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 32(2), pages 267-294, June.
    10. Jin Zhang & Wenjie Sun & Jiao Liu & Wenbin Lu, 2025. "Synergizing Trucks with Fixed-Route Buses to Design an Efficient Three-Echelon Rural Delivery Logistics Network," Mathematics, MDPI, vol. 13(19), pages 1-28, September.
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