Empirical Essays on Retail Logistics and Customer Behavior

Retail logistics is responsible for making products available to end customers. Traditionally, this was facilitated through a network of brick and mortar stores that customers visit to buy items. However, the advent of online and omnichannel retail started to challenge this established system. Modern-day customers increasingly buy a product not solely for its features but also for how, and how fast, the item is delivered and/or returned. Such customer behavior shows that retail logistics often is the decisive factor when searching for, purchasing, and using goods and services. Consequently, logistics performance has become increasingly important for marketing performance. This is in stark contrast to logistics (often) outdated characterization as a back-office operation focusing on cost-effectiveness and lead-time reductions. To overcome the prevailing cost focus, more knowledge is needed that is based on the incorporation of customer behavior into operations management models to demonstrate to retailers the elevated role of logistics in retail today. Therefore, the overall purpose of this dissertation is to contribute to a better understanding of the relevance of logistics in online and omnichannel retail, and its impact on customer behavior. This purpose is explored in four research articles that examine the relevance of logistics from various angles. Article I is a systematic literature review synthesizing empirical literature on the impact of logistics on customer purchase, repurchase, and return behavior in online and omnichannel retail. Article II analyzes how carrying a stock-keeping unit in inventory at the warehouse affects its sales in online retail. Article III investigates how an online retailer’s change in return policy to free returns increases purchases from customers, but also the volume of items being returned to the retailer. Finally, Article IV examines how a buy-online-return-to-store policy in omnichannel retail impacts store performance. The theoretical contributions to the literature are as follows. First, the dissertation illustrates the relevance of logistics in retail today by showing how logistics does not only impact the cost side of a business but also customer behavior and, hence, the demand side. Second, the research highlights the integrative approach that retailers need to adopt between the marketing and operations functions to operate successfully, as action taken by one business function increasingly impacts the other. Third, the dissertation accentuates the role of people in operations management research. It emphasizes how customer behavior is impacted by retail logistics, and thus adds to a better understanding of how people affect real-life operational processes