(Re)solving space and time: Fulfilment issues in online grocery retailing

Abstract

There has been much hype and speculation in the media and in academe on the vitality and future of the 'Internet economy'. In this paper the author uses case studies from Britain, Canada, New Zealand and the United States to assess the strengths and weaknesses of online grocery retailers, from national chain stores pursuing a 'bricks and clicks' strategy to 'pure-play' startups. He argues that delivering groceries via the Internet to customer doorsteps requires ways of solving space and time that are markedly different from previous trends in food retail logistics. He holds that solving problems of space management creates problems in the management of time and vice versa. In particular, 'e-tailers' struggle with fulfilment costs and logistics, and have attempted to manage customers' time and locations to reduce these costs. Store-based operations may be best suited for short-term profitability (or loss minimisation), whereas warehouse-based fulfilment may hold future promise of greater efficiency and flexibility. The author suggests that online organic home delivery may be the most successful type of online food retailer, for its size, given greater customer commitment and problems with store-based supply of organic food.