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Introduction
Omni-channel commerce is driving the most interesting set of logistics challenges the supply chain field has seen in a generation
(Banker, 2013, Forbes).
The modern omni-channel shopper has forever changed retail (Baird and Kilcourse, 2011). Empowered and well-informed, omni-channel shoppers move across channels and expect a seamless customer experience (Ishfaq, Defee, Gibson and Raja, 2016; Ishfaq, Gibson and Defee, 2016) that offers the advantages of both online and in-store shopping (Rigby, 2011; O’Reilly, 2015). Successfully meeting these omni-channel consumer expectations is a complex and challenging endeavor. However, retailers that succeed stand to increase revenues and improve customer retention (Ames, 2015).
Omni-channel shoppers spend 15-30 percent more than traditional shoppers (DHL, 2015; Krueger, 2015) and retailers with strong omni-channel customer service strategies have a 91 percent better customer retention rate than those with weaker omni-channel strategies (Aberdeen Group, 2013; Demery, 2013). It comes as little surprise that retailers are rethinking customer engagement (Mena and Bourlakis, 2016; Ta et al., 2015) and turning to logistics and supply chain leaders in search of strategies to provide personalized service and enable flexible order fullfillment and product delivery (Verhoef et al., 2015; Hübner et al., 2016; Ishfaq, Defee, Gibson and Raja, 2016). A review of 10-K reports from the top “omni-channel winners” of 2016 (Internet Retailer, 2016) highlights the critical importance of an integrated customer experience (Table I) and the opportunity for researchers to provide insights into how omni-channel “works” (Bell et al., 2015).
Logistics is the backbone of any omni-channel strategy (Kanchi et al., 2014) and retailer success is intrinsically linked to logistics effectiveness (Bhattacharjya et al., 2016). In a survey of 410 global retail and consumer goods CEOs, only 19 percent of the top 250 retailers reported having the ability to profitably meet omni-channel demands (JDA, 2015). When asked to identify the areas in most need of attention, 88 percent of the CEOs surveyed pointed to logistics and transportation as being the key to satisfying omni-channel consumer demands (JDA, 2015). This places logistics managers on the front line of retailers’ struggle for competitive differentiation (EY and The Consumer Goods Forum, 2015; Jones, 2013) and highlights the need for an improved understanding of how best to leverage logistics services to satisfy...