Fulfillment costs in online grocery retailing: comparing retail store and warehouse strategies

This study develops a framework that structures the operational costs of online grocery retailing in order to identify which is most suitable e-fulfillment strategy. The cost was designed by applying time-driven activity-based costing (TDABC) and based on insights two large European retailers, operate retail store warehouse strategies respectively. Cost information collected, activity-oriented process modeling carried out field relevant drivers. For strategy, picking were highest among activities up twice as high for delivery 50% higher than Less studied logistics such unpacking reverse all together accounted one third total expenses both strategies. In omnichannel, operations managers must still ensure profitability channel if they want succeed business. will help estimate drivers, allocate them main activities.