Demand Management Opportunities in E-Fulfillment: What Internet Retailers Can Learn from Revenue Management

22 Pages Posted: 15 May 2008

See all articles by Niels Agatz

Niels Agatz

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Ann Melissa Campbell

University of Iowa - Department of Management Sciences

Moritz Fleischmann

University of Mannheim, Business School

J.A.E.E. van Nunen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Martin Savelsbergh

Georgia Institute of Technology - College of Engineering

Date Written: 25 2008 4,

Abstract

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

Agatz, Niels A.H. and Campbell, Ann Melissa and Fleischmann, Moritz and van Nunen, Jo and Savelsbergh, Martin, Demand Management Opportunities in E-Fulfillment: What Internet Retailers Can Learn from Revenue Management (25 2008 4,). ERIM Report Series Reference No. ERS-2008-021-LIS. Available at SSRN: https://ssrn.com/abstract=1131030

Niels A.H. Agatz (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Ann Melissa Campbell

University of Iowa - Department of Management Sciences ( email )

IA
United States

Moritz Fleischmann

University of Mannheim, Business School ( email )

University of Mannheim
P.O. Box 10 34 62
Mannheim, 68131
Germany

Jo Van Nunen

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

HOME PAGE: http://people.fbk.eur.nl/jnunen/personal/

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Martin Savelsbergh

Georgia Institute of Technology - College of Engineering ( email )

Atlanta, GA 30332
United States

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