Last mile fulfilment and distribution in omni-channel grocery retailing: a strategic planning framework

Abstract

Purpose: For traditional grocery retailers, the growing importance of online sales means creating new logistics models for omni-channel (OC) management. Due to these transformational changes, retail research and practice are lacking a comprehensive view on integrated fulfilment and distribution concepts for home and store deliveries as they have evolved recently. This paper develops a planning framework for last mile order fulfilment in OC grocery retailing and discusses the advantages and disadvantages of different design concepts. Design/methodology/approach: The findings were developed and evaluated by means of explorative interviews with grocery retail and logistics experts. Additionally, key literature on last mile order fulfilment and retail supply chain management was reviewed to supplement the integrated OC grocery operations planning framework. Findings: OC logistics planning can be structured into back-end fulfilment (e.g. warehouse and in-store picking) and last mile distribution concepts (e.g. attended and unattended home delivery). The design choices depend on country specifics (e.g. population density), retailer specifics (e.g. capability for cross-channel process integration) and customer behaviour (e.g. possibility of unattended home delivery). The application areas and their contextual factors are discussed for each design parameter. Practical implications: The last mile fulfilment options identified can be applied to pinpoint the necessary steps for further optimizing OC integration. Grocers can gain insights into current fulfilment concepts used in different contexts. This architecture also forms the foundation for further research on decision support systems. Originality/value: The coherent planning framework summarizes the general design options for last mile order fulfilment arising from new requirements for OC fulfilment.