The widespread adoption of e-commerce is impacting a range of stakeholders. Retailers are expected to sell online, logistics operators and parcel companies are required to reconfigure their supply chain and public authorities try to keep local retail competitive while simultaneously attempt to manage the increase in freight transport.
Who is the online shopper?
Within this context, a growing body of research is studying the socio-economic profile of the online shopper and the spatial variation in the demand for B2C goods. Yet, as can be expected for a relatively new evolution, little consensus exists.
Therefore, this research paper by Beckers et. al. adds to this growing field of research by first analyzing the relationship between socio-economic characteristics and the willingness to shop online.
By mapping these characteristics, they then construct the geography of online shopping adoption in Belgium. Finally, they assess the impacts of this specific geography for the stakeholders that are adapting to this new reality.
The well-educated, well-paid young man…
The well-educated man in his thirties with a well-paid job has the highest probability to shop online, independent of the level of urbanization of the area he resides. They predict over- and underestimations of the potential online buyers of up to 50% when assuming a homogeneous e-commerce penetration, especially in poorer urban areas. This implies a serious negligence for e-commerce practitioners and academics when ignoring the specific geography of the online shopping adoption.
Implications for e-fulfillment
These findings have significant value for practitioners working with e-commerce market analyses. For example for logistics carriers concerned with the implementation of collection-and-delivery points (CDP). Originally installed to redirect not-at-home deliveries, these locations evolved to a means to consolidate shipments, hence reducing the delivery costs of the last mile. In addition, within the current competitive logistics sector, the size of the CDP network now has become an important service factor for logistics companies. Because of this, many carriers prioritize customer service and prefer a network with equal distances to their customers, or with a certain demand within their catchment area.
However, since many parcel companies have difficulties to separate data on business-to-business (B2B) and business-to-consumer (B2C) deliveries because they are transported and handled together, historical delivery data does not satisfy the requirements for this rather predictive analysis.
Hence, parcel companies are obliged to turn to population statistics when implementing CDPs. Given the under- and overestimations of e-commerce demand depicted, however, these statistics may result in suboptimal location choices. While ignorance of the geographical variation in such decision models will not cause the bankruptcy of a carrier, its inclusion may provide a slight competitive advantage in this highly competitive market with very small margin
Source:
Beckers, J. (2018), Cárdenas, I., and Verhetsel, A.
Identifying the geography of online shopping adoption in Belgium
Journal of Retailing and Consumer Services, Vol. 45, November 2018