Demand Management Opportunities in E-Fulfillment: What Internet Retailers Can Learn from Revenue Management
22 Pages Posted: 15 May 2008
Date Written: 25 2008 4,
In this paper, we explain how Internet retailers can learn from proven revenue management concepts and use them to reduce costs and enhance service. We focus on attended deliveries as these provide the greatest opportunities and challenges. The key driver is service differentiation. Revenue management has shown that companies can do much better than a one-size-fits-all first-come-first-serve strategy when selling scarce capacity to a heterogeneous market. Internet retailers have strong levers at their disposal for actively steering demand, notably the offered delivery time windows and their associated prices. Unlike traditional revenue management, these demand management decisions affect both revenues and costs. This calls for a closer coordination of marketing and operations than current common practice.
Keywords: demand management, revenue management, home delivery, marketing-operations interface, E-fulfillment, ketenbeheer
JEL Classification: M11, R4, M, D4, L11
Suggested Citation: Suggested Citation