Market area analysis for in-store online order fulfillment: a data driven approach

초록

With the explosive growth of online shopping demand, conventional offline based retailers have started to enter the online shopping market evolving from single channel to omnichannel retailers. In an attempt to leverage existing physical store infrastructure, some of the retailers adopted in-store fulfilment strategy that utilizes store inventory to fulfil online customer orders. The purpose of this study is to provide systematic store locations and product allocation strategy for in-store online order fulfilment in an omnichannel retail environment. We propose a data-driven approach integrating both market basket analysis and spatial cluster detection methods. First, potential in-store fulfilment service areas are identified based on the online sales volume and accessibility to the retail stores. Second, hotspot analysis is performed to detect spatial clusters of high demand locations for the specific product groups identified in the first stage. Finally, stores desirable for in-store fulfilment service are identified and store specific product groups are suggested based on association rule mining for customer orders within the service area of each store.