Fulfilment time performance of online retailers – an empirical analysis

Abstract

Purpose Fast fulfilment is a key performance measure in online retail, and some retailers have achieved faster times by adopting new designs in their order fulfilment infrastructure. This research empirically confirms and quantifies the fulfilment time advantage that Amazon has achieved, relative to other online retailers. The purpose of this paper is to investigate three research questions: what is the overall mean fulfilment time difference between the new logistics designs of Amazon and the alternative designs of other retailers? For each order what is the distribution of the fulfilment time difference? What is the difference in fulfilment time by product category, price and size? Design/methodology/approach This research uses an empirical method to evaluate the fulfilment time performance of consumer orders made through the Amazon website and one or more competing online retailers. For 1,000 different products two fulfilment times, one at Amazon and another at a competing omnichannel retailer, are recorded. The analysis is then focused on the comparison between this paired data. Findings The research confirms that the new logistics methods, including physical facilities, distribution networks and intelligent order processing methods, have resulted in faster order fulfilment times. The performance, though, is not universally dominant and for 33 per cent of orders, the difference is 1 day or less. The fulfilment time difference varied by product, category, price or size. Practical implications The ongoing transformation of fulfilment and logistics operations at online retailers has generated several new research questions. This includes the need to confirm the fulfilment efficiency of the new designs and specify time targets. This paper identifies the fulfilment time gap between new and traditional operations. The results suggest that store-based or distribution centre-based fulfilment strategies may not match the new designs. Originality/value The study provides a quantitative analysis of the fulfilment time differentials in online retailing. The critical role of fulfilment logistics in the rapidly growing online retail industry can now be better modelled and studied. The survey method representing a single buyer allows for order pair equivalency and eliminates order bias. The results suggest that new warehousing and logistics designs can lead to significantly faster fulfilment times.

Digital inbound marketing: Measuring the economic performance of grocery e-commerce in Europe and the USA

“…We investigate this hypothesis graphically and econometrically. Time series analysis is used to check the hypothesis of optimization based on the discrepancy from optimization as a random variable that should follow a white noise process (e.g., Zhang, 2016 ; Zhang et al., 2019 ). …”

Dynamic capabilities for managing logistics challenges of retailers

“…Previous research has focused on various aspects of OC retailing, including OC strategies (e.g. Brynjolfsson et al, 2013;Zhang et al, 2019), OC customer service (e.g. Brynjolfsson et al, 2009), OC marketing (e.g.…”

“…seeing the contents of packages), and performance measurements (e.g. tracking additional sales from click-and-collect, online statistics) (Zhang et al, 2019).…”

Understanding retail quality of sporting goods stores: a text mining approach

“…With the phenomenal growth of e-commerce and online shopping, many recent studies in the retailing literature have focused on Internet retail (Janda, 2002;Nguyen et al, 2018;Trocchia and Janda, 2003;Yang and Fang, 2004;Yang et al, 2003) or aspects of service quality that are pertinent to online retailing, such as logistics and online order fulfillment (Murfield et al, 2017;Zhang et al, 2019). In the same fashion as RSQS's extension of SERVQUAL to accommodate characteristics of retailing, these later studies expanded the literature by incorporating additional dimensions associated with information systems, which is a critical component of online retailing.…”

“…The current study to certain extent cross-validated the existing retailing literature that is developed on alternative methods (Acquila-Natale and Iglesias-Pradas, 2020; Dabholkar et al, 1996;Simmers and Keith, 2015): most themes identified in RQSGS are consistent with the existing literature. Whereas the emerging multi-channel retailing quality literature has focused on the integration of consumer experiences in both physical stores and online stores Sport retail quality (Acquila-Natale and Iglesias-Pradas, 2020;Murfield et al, 2017;Zhang et al, 2019), it does not fit the sporting goods retailing completely as sporting goods stores rely on revenues from physical stores. The current study in the context of sporting goods retailing revealed several points that had not been discussed in the existing literature.…”