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E-fulfilment in grocery retailing: design insights for a store-based distribution system

Author

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  • Monica Rasini
  • Elena Tappia
  • Marco Melacini

Abstract

E-commerce dynamics are making the design of distribution systems more and more challenging, especially in grocery retailing. The use of stores as picking location for e-fulfilment brings the opportunity of both offering fast deliveries and exploiting synergies with the traditional channel. However, efficiently designing a store-based distribution system turns out to be a critical task. This paper addresses the tactical problem of selecting stores to be used as picking location and defining the related delivery zones. We developed a model for the delivery cost estimation using the continuous approximation approach, as well as a heuristic procedure to compare multiple store-based distribution systems. The model was applied to a real case. Results showed that properly selecting the picking locations in a store-based distribution system is recommended because cost saving can be up to 40%. The most cost-effective number of picking locations decreases with an increase in the online demand.

Suggested Citation

  • Monica Rasini & Elena Tappia & Marco Melacini, 2021. "E-fulfilment in grocery retailing: design insights for a store-based distribution system," International Journal of Logistics Systems and Management, Inderscience Enterprises Ltd, vol. 39(4), pages 470-490.
    • Handle: RePEc:ids:ijlsma:v:39:y:2021:i:4:p:470-490
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