Store location and product allocation strategies for in-store fulfillment in an omnichannel retail envrionment

초록

With the explosive growth of e-commerce many brick-and-mortar (B&M) retailers have evolved into omnichannel retailers integrating online channel with their existing offline channel. Such retailers attempt to leverage their physical store networks to fulfill online orders by offering ship-to-store (STS) or buy-online-pickup-in-store (BOPS) services. The purpose of this study is to provide store locations and product allocation strategy for in-store fulfillment in an omnichannel retail environment. This study proposes the following procedure for selecting store locations and the corresponding product allocations. First, customer locations for purchasing different categories of groceries are identified based on historical sales records. Second, hotspot analysis is performed to detect spatial clusters where the demand is high for the specific product groups. Finally, stores desirable for in-store fulfillment services are identified and store specific product groups are suggested based on association rule mining for customer orders within the service area of each store.