Logistics outsourcing in omnichannel retail: State of practice and service recommendations

Abstract

Purpose

The purpose of this paper is to identify in what way logistics service providers are involved in the logistics operations of omnichannel retailers. Given the importance of logistics in omnichannel retail and the complexities that it brings forth, it is unclear if the current tendency towards logistics outsourcing continues, and how logistics service providers should adapt to remain relevant in the omnichannel retail environment.

Design/methodology/approach

The research draws on both desk and field research. The authors analysed the scientific information available on omnichannel retail logistics and conducted semi-structured expert interviews with food and non-food retailers that adopt an omnichannel model.

Findings

The research demonstrates distinct differences between food and non-food retailers. While food retailers are inclined to organise fulfilment and last mile activities in-house, non-food retailers partner closely with logistics service providers. Nonetheless, the store network of non-food retailers is attracting a growing part of logistics activities, which retailers are building themselves. To sustain their relevance in the omnichannel environment and strengthen their position for the future, the authors created a competency recommendation framework for logistics service providers, in which service differentiation is proposed as a viable direction for growth.

Research limitations/implications

The research is based on insights from retailers based in the Brussels-Capital Region (Belgium) and requires further and wider testing in other contexts and geographical areas.

Practical implications

The findings have strategic importance for retailers that are developing an omnichannel retail model and logistics service providers that (aim to) serve clients and operate activities within the retail sector.

Originality/value

The research provides a holistic view of logistics in omnichannel retail by identifying insourcing and outsourcing mechanisms and developing competency recommendations to fulfilment, internal transport and last mile transport in omnichannel retail.

Citation

Buldeo Rai, H., Verlinde, S., Macharis, C., Schoutteet, P. and Vanhaverbeke, L. (2019), "Logistics outsourcing in omnichannel retail: State of practice and service recommendations", International Journal of Physical Distribution & Logistics Management, Vol. 49 No. 3, pp. 267-286. https://doi.org/10.1108/IJPDLM-02-2018-0092