Upselling at delivery

Timothy L. Urban and Robert A. Russell

International Journal of Revenue Management, 2024, vol. 14, issue 1, 1-32

Abstract: The COVID-19 pandemic has accelerated an already increasing migration from in-store to online shopping. For retailers with products conducive to upselling and cross-selling, this type of disruption can have a substantial impact on sales volume and revenue generation. One approach that has been proposed to improve a firm's resilience is to move up-/cross-selling efforts to the delivery personnel, since that is where direct contact with the customer occurs. Therefore, the purpose of this research is to formalise the 'driver becoming salesperson' strategy, and to integrate this concept with the routing of delivery vehicles for the most-efficient last-mile delivery. A mixed-integer formulation of the problem as well as bounds on the solution is provided. The resulting model is analysed with several solution procedures, a numeric experiment is conducted to illustrate the process of identifying potential upselling product to load onto the delivery vehicles, and managerial implications are presented.

Keywords: retailing; last-mile delivery; upselling; cross-selling; pantry loading; vehicle routing; time windows. (search for similar items in EconPapers)
Date: 2024
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