In the grocery business online start‐ups, e‐grocers, have in the last few years developed new business models to challenge the traditional bricks‐and‐mortar supermarkets. However, many of the big players in the e‐grocery business, such as Peapod and Webvan in the USA, still operate in the red. They have financed rapid growth by collecting hundreds of millions of dollars from investors. These huge investments have enabled the e‐grocers to enter the grocery market but, on the other hand, ineffective operations have used up capital on operating expenses. If the e‐grocers want to become serious challengers to the traditional bricks‐and‐mortar business, they need to cut operational costs dramatically and fast. This paper illustrates some basic principles for cutting operational costs in the e‐grocery business. The focus is on picking efficiency and order assembly costs. Solutions for achieving better picking efficiency are discussed. In addition, one detailed example of how a grocery distribution centre for efficient picking could be designed is presented.
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1 January 2001
Research Article|
January 01 2001
Cost‐effectiveness in the e‐grocery business
Vesa Kämäräinen;
Vesa Kämäräinen
Researcher in the Department of Industrial Engineering and Management, Helsinki University of Technology, Finland.
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Johanna Småros;
Johanna Småros
Researcher in the Department of Industrial Engineering and Management, Helsinki University of Technology, Finland.
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Jan Holmström;
Jan Holmström
Senior Research Fellow in the Department of Industrial Engineering and Management, Helsinki University of Technology, Finland.
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Tomi Jaakola
Tomi Jaakola
Logistics Designer at S‐Kanava Oy, Helsinki, Finland.
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Publisher: Emerald Publishing
Online ISSN: 1758-6690
Print ISSN: 0959-0552
© MCB UP Limited
2001
International Journal of Retail & Distribution Management (2001) 29 (1): 41–48.
Citation
Kämäräinen V, Småros J, Holmström J, Jaakola T (2001), "Cost‐effectiveness in the e‐grocery business". International Journal of Retail & Distribution Management, Vol. 29 No. 1 pp. 41–48, doi: https://doi.org/10.1108/09590550110366352
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