Logistical challenges and potentials in multi-channel food retailing & distribution

Manufacturer's concepts for direct supply to food retailers have already been replaced in the 1970s by establishment of logistical supply networks and concepts. The development of IT-based enterprise resource planning systems and the design of efficient networks of stores consequently led to higher availability and improved service levels for consumers. Although the management of logistics costs always remains challenging within existing supply processes, e-commerce adds another new challenge. Existing goods supply processes in store-based retailing will be complemented by additional goods flows from online sales, in future. Studies increasingly show the relevance of multi-channel retailing: consumers' loyalty rises, unless additional information and distribution options in food retailing are available online. However, food retailers in Austria only recently start opening online distribution channels by providing deliveries of food and hygiene items in own dedicated web-shops. Reasons for this corresponding restraint are diverse: (i) very high store density, (ii) high level of consumer satisfaction with current store-based concepts and (iii) the not yet fully developed handling of logistical procedures and infrastructure in food online processing (e.g. packaging, cooling, etc.). It is necessary to adapt existing supply processes in food retailing to be able to handle the „last-mile“ cost- and time-efficient. The main aspect in terms of these challenges for efficiently logistics processing in online retailing is the creation of optimum synergies with existing supply processes. In the underlying research, a derived holistic view of various requirements of distribution structures identifies corresponding potential: the role of end consumers in the network is as considered as the predominant process structures and possible last-mile concepts for online distribution in Austrian food retailing. A resulting two-stage potential-rating implies consumer side as well as retailer-side aspects in order to determine the important economic dimensions and logistics capabilities of different supply concepts.