Personal Shopper Systems in Last-Mile Logistics

Jelmer Pier van der Gaast () and Alp Muzaffer Arslan ()
Additional contact information
Jelmer Pier van der Gaast: Department of Management Science, Fudan University, Shanghai 200437, China
Alp Muzaffer Arslan: Department of Management Science, Lancaster University, Lancaster LA1 4YX, United Kingdom

Service Science, 2023, vol. 15, issue 1, 41-57

Abstract: This paper explores the logistics operations of instant grocery delivery services. Therefore, we introduce the instant delivery problem ( IDP ) to replicate and examine two widely adopted strategies in the rapid delivery market: the personal shopper system (PSS) and the inventory owned delivery (IOD) system. In the PSS, couriers visit affiliated brick-and-mortar stores in the delivery area to pick up and purchase ordered products and then deliver them to customers. In the IOD system, couriers collect products from a single distribution center, or so-called dark store, in which the platform manages the inventory. Even though a PSS strategy is asset light because of the utilization of existing retailers in the area, maintaining a good level of on-time instant deliveries with the PSS is more complex than with IOD. This is because the PSS requires deciding which store to purchase ordered goods from, and picking and shopping at stores needs to be considered in the real-time decision process. We propose a tailored rolling horizon framework that utilizes column generation to browse updated delivery plans for arriving customer orders. Computational studies both in real life–inspired settings and in case studies on selected urban areas show that the PSS is a highly competitive strategy compared with IOD, particularly when dealing with small-sized customer orders. We observe that the performance of the PSS is robust when varying the delivery service time frame. The case studies also suggest that the PSS becomes even more competitive in areas where the retail store density is high.

Keywords: instant delivery; personal shopper systems; last-mile logistics; optimization; dark stores (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1287/serv.2022.0310 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orserv:v:15:y:2023:i:1:p:41-57

Access Statistics for this article

More articles in Service Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().