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Article
Publication date: 11 February 2019

Customers’ valuation of time and convenience in e-fulfillment

Tobias Gawor and Kai Hoberg

The purpose of this paper is to derive monetary benchmarks and managerial implications for omni-channel retailers’ B2C e-fulfillment strategies by investigating the…

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Abstract

Purpose

The purpose of this paper is to derive monetary benchmarks and managerial implications for omni-channel retailers’ B2C e-fulfillment strategies by investigating the trade-offs between lead time, delivery convenience and total price including shipment in the context of online electronics retailing.

Design/methodology/approach

Based on a choice-based conjoint analysis among 550 US online shoppers, the monetary values of lead time and convenience were calculated in a log-log regression model. In addition, latent class segmentation was applied to identify consumer segments according to their differing e-fulfillment preferences.

Findings

From a consumer perspective, the analysis suggests that price is the most important criteria in omni-channel retailer selection, followed by lead time and convenience. The value of time is, on average, $3.61 per day. Regarding convenience, the results indicate that delivery to the home is highly preferred over pick-up options. The value of the consumer’s travel time was estimated at $10.62 per hour. The latent class segmentation identified four segment groups with different preferences.

Research limitations/implications

To validate the findings, future research could analyze real data from omni-channel retailers’ customers’ buying behavior. It should also be interesting to extend the research to other price ranges, market segments and e-fulfillment factors, such as return options, shop ratings and membership programs aiming for further generalization.

Practical implications

The findings guide omni-channel retailers to focus on efficient B2C e-fulfillment strategies. Considerable competitive advantages may be gained by reducing lead times and offering convenient delivery in line with the lead time valuation of the identified customer segment.

Originality/value

This study fills gaps in the academic research of consumer behavior in retailer selection, which has primarily concentrated on the choice between “brick-and-mortar” and online sales channels. It paves the way for a more service-oriented perspective in omni-channel retailing research.

Details

International Journal of Physical Distribution & Logistics Management, vol. 49 no. 1
Type: Research Article
DOI: https://doi.org/10.1108/IJPDLM-09-2017-0275
ISSN: 0960-0035

Keywords

  • Choice-based conjoint analysis
  • E-fulfillment
  • Latent class segmentation
  • Omni-channel retailing
  • Value of convenience
  • Value of time

Content available
Article
Publication date: 11 February 2019

Special issue editorial: logistics customer service revisited

Benjamin T. Hazen and Alexander E. Ellinger

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Abstract

Details

International Journal of Physical Distribution & Logistics Management, vol. 49 no. 1
Type: Research Article
DOI: https://doi.org/10.1108/IJPDLM-02-2019-373
ISSN: 0960-0035

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