E-fulfillment cost management in omnichannel retailing: An exploratory study

The purpose of this study is twofold: investigating how omnichannel (OC) retailers manage e -fulfillment costs and establishing how these costs relate to the evolution of OC retailers ' e -fulfillment strategies. Experts in efulfillment from 34 European OC retailers across various sectors participated in an exploratory survey. The study 's results reveal that although e -fulfillment costs significantly influence the evolution of e -fulfillment strategies, many OC retailers fulfilling online orders from retail stores or traditional warehouses remain unaware of the actual costs of e -fulfillment. Activities other than picking and last -mile delivery, such as inbound logistics and storage, are poorly controlled. Furthermore, complex cost metrics such as cost-to-serve -the total cost associated with delivering a specific order to a specific customer -are predominantly found among OC retailers operating fulfillment centers (FCs) in their e -fulfillment distribution networks. This underscores the need for all OC retailers to accurately assess e -fulfillment costs at multiple levels, which will be crucial for optimizing order preparation, tailoring pricing strategies, and achieving profitability, especially when operating hybrid e -fulfillment strategies where online orders are prepared in multiple facilities. As the largest study on e -fulfillment costs to date, it highlights the importance of advancing e -fulfillment cost management systems among OC retailers and adopting an approach that encompasses all e -fulfillment activities. Future research should delve into the key challenges of developing these systems, considering the operational realities of each OC retailer.