Feeding the Nation—Dynamic Customer Contacting for E-Fulfillment in Times of Crisis

Abstract

The outbreak of the COVID-19 pandemic led demand for online grocery orders for both click & collect (C&C) and attended home delivery (AHD) to outstrip delivery capacity by a wide margin. In the United Kingdom, the booking systems of some e-retailers could not handle the flood of incoming requests, forcing the retailers to proactively reach out to certain priority customer segments with the aim of serving as many high-priority customers as possible. To determine when to contact each customer segment in this extraordinary demand environment, we investigate the new demand management concept of proactively contacting customers. We first develop a decision policy for the C&C fulfillment method to address the problem of when to contact customers. We then extend this approach to the AHD setting. To cope with increased problem complexity, we propose a three-step procedure to solve this problem. First, we subdivide the delivery area into smaller subareas; second, we select the most promising subareas; and third, we determine which customers to contact within the chosen subareas. To gain managerial insights and to show the practical benefits of our approaches, we apply both approaches to realistic data from the London area. Our results show that proactive customer contacting allows for a tailored allocation of scarce capacity in e-groceries. We conclude with a discussion on how these contacting techniques can be valuable in postcrisis times. History: This paper has been accepted for the Service Science Special Issue on Innovation in Transportation-Enabled Urban Services.