Online Grocery Retail: Revenue Models and Environmental Impact

@article{Belavina2017OnlineGR,
  title={Online Grocery Retail: Revenue Models and Environmental Impact},
  author={Elena Belavina and Karan Girotra and Ashish Kabra},
  journal={Chicago Booth Research Paper Series},
  year={2017}
}
This paper compares the financial and environmental performance of two revenue models for the online retailing of groceries: the per-order model, where customers pay for each delivery, and the subscription model, where customers pay a set fee and receive free deliveries. We build a stylized model that incorporates (i) customers with ongoing uncertain grocery needs and who choose between shopping offline or online and (ii) an online retailer that makes deliveries through a proprietary… 
View on SSRN
akabra.com
82 Citations
Highly Influential Citations
2
Background Citations
26
Methods Citations
4
Results Citations
1

Figures and Tables from this paper

82 Citations

On the Value of Subscription Models for Online Grocery Retail
The Environmental Impact of the Advent of Online Grocery Retailing
This study assesses the environmental impact of the advent of online grocery retailing. We model the grocery supply chain before and after the emergence of online grocery retail. The models include…
Removing barriers for grocery stores: O2O platform and self-scheduling delivery capacity
Towards Profitable Growth in E-Grocery Retailing - the Role of Store and Household Density
Despite the continued growth of e-grocery sales, few companies actually make any profits in this retail segment. Increasing market shares and associated drop densities may render profitable…
Optimal Fulfillment Strategies in an Omnichannel Retail Supply Chain
With the development of digital technologies, more and more brick-and-mortar stores are starting to offer the online channel to sell their products. For example, Walmart and Whole Foods are selling…
Collaboration in urban distribution of online grocery orders
Purpose Population growth, urbanisation and the increased use of online shopping are some of the key challenges affecting the traditional logistics model. The purpose of this paper is to focus on…
Collaboration in the last mile: evidence from grocery deliveries
ABSTRACT The grocery sector has transitioned into an omnichannel operating mode, allowing consumers to buy online and have their order delivered to their chosen address. The last mile delivery…
Optimal consumer sales tax policies for online‐offline retail operations with consumer returns
Multichannel strategies are widely observed in practice. In some jurisdictions, the previously tax‐free online channel is now required to remit sales tax. Motivated by policy evolution and sales‐tax…
Last-Mile Capacity Constraints in Online Grocery Fulfilment in Great Britain
Forecast growth in e-commerce home-delivery demand provides retailers with opportunities for expansion and increased levels of investment. To maximise these growth opportunities, retailers face…
Power structure and channel integration strategy for online retailers
...
...

References

SHOWING 1-10 OF 32 REFERENCES
Retail Store Density and the Cost of Greenhouse Gas Emissions
TLDR
A model of the retail supply chain is presented that includes operating costs such as fuel and rent for floor space as well as a cost for environmental externalities associated with carbon emissions.
Quantifying Transaction Costs in Online/Offline Grocery Channel Choice
TLDR
It is found that transaction costs for grocery shopping can be sizable and play an important role in the choice between online and off-line channels and the implications for the retailer's channel strategy are discussed.
Measuring the Frictional Costs of Online Transactions: The Case of a Name-Your-Own-Price Channel
TLDR
It is found that consumers who have gathered experience with the NYOP channel in previous transactions exhibit lower frictional costs than consumers who use the channel for the first time, and sociodemographic variables do not help to explain the variation in frictional cost.
Usage Restriction and Subscription Services: Operational Benefits with Rational Users
TLDR
A rental firm that offers reusable products to price-and quality-of-service--sensitive customers is studied, and it is shown that both the firm and the consumers can benefit from the subscription option.
Optimal Pricing of New Subscription Services: Analysis of a Market Experiment
There are now available a number of new subscription services that comprise a dual pricing system of a monthly access fee rental and a per-minute usage charge. Examples include cellular phones, the…
Is Leasing Greener than Selling?
TLDR
It is found that leasing can be environmentally worse despite remarketing all off-lease products and greener than selling despite the mid-life removal of off- leases, and when educating consumers to be more environmentally conscious can improve the relative environmental performance of leasing.
Pricing Services Subject to Congestion: Charge Per-Use Fees or Sell Subscriptions?
TLDR
It is concluded that subscription pricing can be effective even if congestion is relevant for the overall quality of a service, and relatively more attractive if consumers become more heterogeneous in their service rates.
Analysis of the (Q, r) Inventory Model for Perishables with Positive Lead Times and Lost Sales
TLDR
A perishable inventory system with Poisson demands, fixed shelf lives, constant lead times, and lost sales in the presence of nonnegligible fixed ordering costs is considered and the determination of the policy parameters exactly as modeled herein results in significant improvements in cost rates with respect to a previously proposed heuristic.
Perishable Inventory Systems
TLDR
The authors develop economicorder-quantity-based models with perishable items to evaluate the impact of a form postponement strategy on the retailer in a supply chain and show that a postponement strategies for perishable Items may lead to lower total average cost.
Optimal Ordering Policies for Continuous Review Perishable Inventory Models
TLDR
The traditional perishable inventory costs of ordering, holding, shortage or penalty, disposal and revenue are incorporated into the continuous review framework and the type of policy that is optimal with respect to long run average expected cost is presented for both the backlogging and lost-sales models.
...
...