International Journal of Physical Distribution & Logistics Management

Ishfaq, Rafay; Defee, C. Clifford; Gibson, Brian J; Raja, Uzma

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-02-2015-0032

Purpose– The purpose of this paper is to identify the realignment of the physical distribution process for store-based retailers in their efforts to integrate the online channel into their business model. Multiple attributes of the physical distribution process are evaluated to identify associations with order fulfillment methods adopted by omni-channel retailers. Design/methodology/approach– A multi-method approach is used which includes qualitative evaluation of 50 interviews of supply chain executives from large retailers. Additionally, secondary data about firm size, store and distribution networks, online sales, distribution configuration, and order delivery options are used. The findings of qualitative analysis are incorporated into a quantitative classification-tree analysis to identify associations among distribution attributes, order fulfillment methods and order delivery services. Findings– Retailers are developing a consistent omni-channel physical distribution process in which stores undertake a bigger role in order fulfillment and delivery. Level of online sales, size of distribution network, number of sales associates at a store, and number of years engaged in the online channel are identified as having strong associations with the type of order fulfillment method used by omni-channel retailers. The study finds that retailers are focussed on integrating their store and DC inventories and have the benefit of scale with a large store network. Practical implications– Retailers are reconfiguring their physical distribution processes in the complex omni-channel environment can use the findings of this study to evaluate their strategy and identify the level of realignment effort that is needed. A better understanding of the requirements of physical distribution in an omni-channel setting will guide retailers in developing requisite operational capabilities. Originality/value– This paper provides a first in-depth look at order fulfillment choices in omni-channel retail and identifies efforts that are underway to realign key elements of the physical distribution process.

Hübner, Alexander; Wollenburg, Johannes; Holzapfel, Andreas

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-08-2015-0179

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.

Bernon, Michael; Cullen, John; Gorst, Jonathan

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-01-2015-0010

Purpose– With the rapid growth of consumer sales being fulfilled through omni-channel retailing, the purpose of this paper is to explore the subsequent impact on the levels of consumer retail returns experienced through online sales and the emergent returns management strategies being affected by retailers in relation to network configuration and returns management processes. Design/methodology/approach– The authors uses a mixed methods approach from an interpretive perspective. It is appropriate to describe the approach in terms of convergent design, since the authors have collected both qualitative and quantitative data. Findings– Return rates for online retailing can be double those for stores, while return levels for “considered purchases” remain similar. The findings suggest that omni-channel returns management has yet to fully mature and the authors find challenges for network design and returns processes in offering a seamless solution. Research limitations/implications– For practitioners the authors identify a number of challenges and offer insights to improve performance in returns management process, while for academic colleagues the authors propose a number of avenues for further research both in the qualitative and quantitative fields. Originality/value– While a significant body of extant literature exists, in researching the generalized retail returns management process this paper make a contribution by addressing the emergent managerial implications of omni-channel retail returns.

Ahsan, Kamrul; Rahman, Shams

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-09-2015-0235

Purpose– In spite of regular occurrence of product returns, research into determinants of returns services in retail businesses is still limited. To fill the gap, the purpose of this paper is to investigate critical determinants of customer to business type product returns services in the retail industry. Design/methodology/approach– The authors develop a framework of product returns services that consists of three major service categories and 16 returns service determinants. The criticality of the determinants of product returns management are assessed employing the analytic hierarchy process (AHP) based multi-criteria decision-making approach. Under AHP set up the authors interview retail operations managers of major retail firms in Australia to identify critical determinants of product returns services. Findings– Results indicate that the most important returns services dimensions are the way in which returns services are handled through interaction, and the outcome of service delivery. The top five critical service determinants of product returns are related to: communication support service for customer, money back for any type of returns, customer support access, user-friendly interaction, and product replacement. Originality/value– The findings of the study can be considered by senior managers of retail firms as a reference guide for designing efficient and effective returns service systems and developing strategies for competitive advantage through product returns, namely, customer retention.

Holweg, Christina; Teller, Christoph; Kotzab, Herbert

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-11-2014-0285

Purpose– The purpose of this paper is twofold: first, to explore the complexities of regularly implemented as well as irregularly occurring – sometimes improvised – instore logistics processes related to products which are declared unsaleable; and second, to identify the challenges and opportunities in managing instore logistics processes related to unsaleable products in grocery stores. Design/methodology/approach– The authors apply an embedded case study approach. Within each case, i.e. dominant store format, the authors investigate the instore logistics processes of 32 retail and wholesale stores and focus further on those processes related to products declared unsaleable. The case study research methodology comprises in-depth interviews with store and category managers, point of sale observations and secondary data research. Findings– The authors identified four different specific instore logistics processes depending on the residual product value of unsaleable products. The analysis of these processes suggests that establishing more efficient return, disposal, recycling, and most importantly, redistribution processes leads to various benefits such as cost savings, more effective and efficient operations, better use of resources and waste reduction, while at the same time supporting charitable institutions and people in need. Originality/value– The contribution of this research are: first, to provide a better understanding of different ways of seeing and handling unsaleable products; and second, to reveal the significant importance of focusing on instore logistics beyond the point of sale with respect to the economic, ecological and social benefits to retailers, wholesalers and their stakeholder groups.

Bhattacharjya, Jyotirmoyee; Ellison, Adrian; Tripathi, Sonali

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-01-2015-0007

Purpose– The success of e-retailers is intrinsically linked to the effectiveness of their logistics processes which, inevitably, involve third party service providers. As the most tangible representative of the e-retailers it is inevitable that customers expect the e-retailer to resolve delivery queries, including on social media platforms. The purpose of this paper is to investigate the effectiveness of e-retailers’ logistics-related customer service interactions on Twitter with a view towards identifying effective and ineffective social media customer service strategies. Design/methodology/approach– The design and public nature of Twitter encourages organic conversations between e-retailers and customers as well as between customers and other customers. The methodology applied here accounts for this by collecting and analysing interactions within and as part of conversations, not as independent observations. In total, 203,349 tweets were collected from 22 of the most popular e-retailers. A random sample of 5,000 logistics-related conversations (16,998 tweets) is used for the analysis presented here and forms a foundation for future research. Findings– Conversations are initiated by customers on the basis of 24 event triggers which can be categorised as occurring either before or after an order is delivered. These can be general queries or related to a specific order or delivery issue. The paper identifies a number of significant findings such as the extent to which e-retailers and logistics providers redirect customers to other channels to resolve queries, ignoring the implicit preference by customers to use Twitter to resolve their problem. Similarly, the lack of interactions between e-retailers and their logistics providers within the Twitter platform to help resolve customer queries results in ineffective customer service. Practical implications– The study identifies the way in which e-retailers can substantially improve the effectiveness of the customer service they provide on Twitter by ensuring that customer queries can be resolved within the platform and by working with their logistics partners to do the same. This is critical since problems may be directed to the e-retailer or the logistics provider but both companies jointly suffer the consequences of poor customer service. Originality/value– The study examines a hitherto underexplored aspect of retail logistics – the social media-based customer service activities of e-retailers. Methodologically, the study is rooted in the acknowledgement that interactions on Twitter form conversations and analyses should take this into account. This is a distinctly different approach from existing Twitter-related studies which conduct an automated sentiment analysis of tweets. This approach reveals a rich picture of interactions and, importantly, identifies where conversations between e-retailers begin, how they develop and how they conclude.

Hançerlioğulları, Gülşah ; Şen, Alper; Aktunç, Esra Ağca

2016 International Journal of Physical Distribution & Logistics Management

doi: 10.1108/IJPDLM-12-2014-0303

Purpose– The purpose of this paper is to investigate the impact of demand uncertainty on inventory turnover performance through empirical modeling. In particular the authors use the inaccuracy of quarterly sales forecasts as a proxy for demand uncertainty and study its impact on firm-level inventory turnover ratios. Design/methodology/approach– The authors use regression analysis to study the effect of various measures on inventory performance. The authors use a sample financial data for 304 publicly listed US retail firms for the 25-year period from 1985 to 2009. Findings– Controlling for the effects of retail segments and year, it is found that inventory turnover is negatively correlated with mean absolute percentage error of quarterly sales forecasts and gross margin and positively correlated with capital intensity and sales surprise. These four variables explain 73.7 percent of the variation across firms and over time and 93.4 percent of the within-firm variation in the data. Practical implications– In addition to conducting an empirical investigation for the sources of variation in a major operational metric, the results in this study can also be used to benchmark a retailer’s inventory performance against its competitors. Originality/value– The authors develop a new proxy to measure the demand uncertainty that a firm faces and show that this measure may help to explain the variation in inventory performance.