Using customer-related data to enhance e-grocery home delivery

Abstract

Purpose – The development of e-grocery allows people to purchase food online and benefit from home delivery service. Nevertheless, a high rate of failed deliveries due to the customer’s absence causes significant loss of logistics efficiency, especially for perishable food. The purpose of this paper is to propose an innovative approach to use customer-related data to optimize e-grocery home delivery. The approach estimates the absence probability of a customer by mining electricity consumption data, in order to improve the success rate of delivery and optimize transportation. Design/methodology/approach – The methodological approach consists of two stages: a data mining stage that estimates absence probabilities, and an optimization stage to optimize transportation. Findings – Computational experiments reveal that the proposed approach could reduce the total travel distance by 3-20 percent, and theoretically increase the success rate of first-round delivery approximately by18-26 percent. Research limitations/implications – The proposed approach combines two attractive research streams on data mining and transportation planning to provide a solution for e-commerce logistics. Practical implications – This study gives an insight to e-grocery retailers and carriers on how to use customer-related data to improve home delivery effectiveness and efficiency. Social implications – The proposed approach can be used to reduce environmental footprint generated by freight distribution in a city, and to improve customers’ experience on online shopping. Originality/value – Being an experimental study, this work demonstrates the effectiveness of data-driven innovative solutions to e-grocery home delivery problem. The paper also provides a methodological approach to this line of research.