Operations management in multi-channel retailing: an exploratory study

Multi-channel (MC) shopping is revolutionizing retail operations. For traditional retailers, the growing importance of online sales means creating new supply chain models. This requires a solid understanding of the operations processes. Current literature on MC management focuses on customer perspectives, but only touches on the operational aspects. The primary goal of this study is therefore to give a comprehensive overview of the operations structures of MC retailing, identify the operations systems in use and analyze their planning interdependencies. We identify network design, inventory management, warehouse operations and capacity management as the areas of MC operations planning. Their planning interdependencies are investigated. We analyze the different MC networks and the associated inventory management approaches as well as the various design concepts in warehouse operations. The efficiency of integrating warehouse operations is the core lever for integrated MC operations. While inventory pooling favors integrated networks, channel-specific operational challenges are a reason to simplify structures and operate separate networks. Specific operational design options (e.g., in picking and scheduling) are identified to optimally complement the network design selected. Company examples also give an idea of how to efficiently design the coordination of on- and offline logistics. Retailers can gain important insights into how to further develop their systems. We used an explorative approach to identify structures and processes in a relatively new research area. We questioned 43 executives from 33 different European-based leading companies in MC retailing in semi-structured, face-to-face interviews. This paper describes the results of what is currently the largest study on MC operations.