Strategies to improve customer service in delivery time slot management

Abstract

In several online retail contexts, such as grocery retailing, customers have to be present at the moment of delivery, that is, an attended home delivery service is in place. This requirement adds new challenges to this channel, often leading to narrow profitability. From an operations perspective, this service is performed with the retailer offering multiple time slots for the customer to choose from. Retailers target a cost-efficient delivery process that also accounts for customers' preferences by properly managing the options to show to customers, that is, time slot management. This study analyzes a dynamic slotting problem, that is, choosing the best slots to show for each customer, which is close to many practical cases pursuing a customer service orientation. We study two new strategies to improve customer service while satisfying cost-efficiency goals: (i) enforcing a constraint on the minimum number or percentage of slots to show to customers and (ii) integrating multiple days when tackling this challenging problem. Our results show under which conditions these proposed strategies can lead to win-win situations for both customer service and profit.