Title:	The effect of mitigation measures for order fulfillment failures in online retail
DNr:	NAISS 2024/22-1051
Project Type:	NAISS Small Compute
Principal Investigator:	Fredrik Eng Larsson <fredrik.englarsson@sbs.su.se>
Affiliation:	Stockholms universitet
Duration:	2024-08-12 – 2024-11-01
Classification:	50202
Keywords:

Abstract

Retailers have long struggled with out-of-stocks. This challenge has been further emphasized for grocery retailers operating the online channel, mainly using stores for fulfillment (e.g., buy-online-pick-up-in-store and ship-from-store). Consequently, online customers commonly receive orders where products have been substituted, where products are only partially fulfilled, or where a full reimbursement has been issued from the missing items. When these order fulfillment failures occur, the customer may change his future purchase behavior by purchasing less frequently or making purchases of lower basket value in this online channel. Using data from the online operation of a leading omnichannel grocery retailer, we first evaluate the magnitude of the impact of fulfillment failures on future online purchases and then we explore the role of retailer responses in mitigating this impact.