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1. Introduction
Over the past two decades retailing has undergone dramatic and accelerating change, largely due to the advent of the direct-to-consumer online channel and an ongoing surge in information technology capabilities (Gallino and Moreno, 2014; Piotrowicz and Cuthbertson, 2014; Verhoef et al., 2015). Sales for the online channel continue to grow rapidly, while foot traffic has become stagnant or is declining among many brick-and-mortar stores (Sorescu et al., 2011). Indeed, during calendar year 2017, approximately 7,000 US brick-and-mortar stores closed, and iconic merchandisers such as JC Penney, Kmart, Macy’s, Radio Shack and Sears each closed more than 100 stores (Thomas, 2017).
Retailers initially adapted to these disruptive channel developments by developing multichannel marketing, fulfillment and delivery strategies (Agatz et al., 2008; Rigby, 2011; Christensen and Raynor, 2013). To this end, companies typically established online fulfillment operations that were autonomous from their brick-and-mortar operations. This often included separate and distinct order fulfillment capabilities for each channel, which resulted in dedicated storage facilities for each channel as well as inventory and other fulfillment assets that were committed to a specific channel (Frazier, 1999; Swaminathan and Tayur, 2003).
Within the past 15 years, some retailers began to refine their multichannel capabilities to focus on so-called “omnichannel” capabilities. Briefly, an omnichannel experience allows a customer to order from multiple platforms (omnichannel retailing) and the order can be filled from any location using inventory and other fulfillment assets flexibly across channels (omnichannel fulfillment). Conceptually, omnichannel capabilities provide a seamless shopping experience where the distinctions between brick-and-mortar and online operations become immaterial (Ishfaq et al., 2016; Galipoglu et al., 2018). The grocery industry was among the earliest to experiment with an omnichannel capability by implementing a buy-online-ship-from-store (BOSS) option for customers (De Koster, 2002; Boyer and Hult, 2006). One consequence of companies developing their omnichannel fulfillment strategies is a realization that tying fulfillment assets to particular channels increases inefficiency in terms of managing logistics costs and service.
In response to these changes in the retail environment, interest in omnichannel fulfillment has been increasing and academic articles focusing on the fulfillment and inventory aspects of omnichannel have become more plentiful in recent years. As such, we propose that the omnichannel fulfillment literature has developed sufficiently to...