EURO 2024 Copenhagen
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456. Channel Switching in Omni-Channel Retailing

Invited abstract in session WC-50: E-Commerce, stream Retail Operations.

Wednesday, 12:30-14:00
Room: M2 (building: 101)

Authors (first author is the speaker)

1. Bahriye Cesaret
Faculty of Business, Ozyegin University
2. Armagan Bayram
University of Michigan Dearborn

Abstract

The evolution of technology has changed the ways customers engage with retailers. Customers now utilize various sales channels in their buying processes. Consequently, retailers are challenged with customers who tend to switch between various sales channels. Omni-channel retailing allows customers to buy products from anywhere and return them anywhere, while allowing retailers to fulfill orders from anywhere. This flexibility enhances the customer experience by integrating all channels, allows retailers to achieve more availability and boosts the sales and traffic of the retailers. However, it also places significant pressure on retailers to streamline their operations efficiently and expedite product delivery to customers. In this study, we explore two omni-channel implementations, namely, ship-from-store and home delivery. Store customers can opt for in-store fulfillment or request home delivery, whereas online orders can be shipped from the fulfillment center or any other store location that maximizes the retailer’s overall profit. We further consider that both store and online customers can switch across channels. We construct a dynamic programming framework to examine optimal fulfillment decisions for both online and store orders, accounting for uncertainties in both demand and the cost of shipment to individual customers. We present our results through optimal fulfillment strategies and numerical experiments.

Keywords

Status: accepted

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