1. Consumer Logistics:
“movement and handling of goods and people that is performed by consumers to facilitate consumption.”
Granzin (1990)

2. The Downstream Supply Chain
M W R C
M = manufacturer R = retailer
W = wholesaler C = consumer

3. Consumer (Logistics) Behavior
Need Recognition
Transportation
Shopping/Search
Exchange
Transportation & Storage
Production/Consumption

4. Consumer Behavior--Two Views

5. Where does the money go? (Kelley 1958)
Time & Money
Where does the money go? (Kelley 1958)
commodity costs
convenience costs
Where does the time go? (Downs 1961)
travel time
shopping time
checkout time

6. TC = price + transportation + time
Crowell & Bowers (1977)
TC = price + transportation + time
Add cost of time to the equation and consumers visit fewer stores.

7. “Prisoner of Time,” Ms., Oct. 1988
“during her or his lifetime, the average American squanders five months waiting for traffic lights to change, eight months opening unsolicited mail, a year looking for misplaced objects, two years in futile attempts to return phone calls, four years doing basic housework, and five years waiting in line--a total of 13 years gone up in smoke.” Pogrebin (1988)

8. The Alberta Phone Survey
Random-digit dialing
10 call backs
CATI: computer-assisted telephone interviews
30-minute confidential interview
Urban vs. Rural
Topic: grocery shopping
R = 67.1%

9. Shopping List?
YES %
NO %

10. Transportation Mode
CAR %
FOOT %

11. Stockout Response Go to Store B Stockout of item x Buy item y
at Store A
Buy item y
Backorder
(defer purchase)

12. Response to Stock-out of Item x at Store A
Item x at Store B %
Item y at Store A %
Defer purchase %

13. Time and Availability Average Travel Time = 13.8 minutes
Average Shopping Time = 41.2 minutes
Average Checkout Time = 12.5 minutes
Average Stock-out = 1.4 items

14. Predictors of Consumer Satisfaction
Stock Availability YES
Check-out Time YES
Shopping Time NO
Travel Time NO

15. How to: Please the Consumer
reduce product prices
save consumers time (Bender 1964)
give TLC!
Tender Loving Care
Total Logistics Costs

16. TC = pQ + c(I - A) + a(2D) + wT
p = purchase price
Q = quantity purchased
c = compromise cost
I = ideal item; A = actual item
a = cost of travel ($/mile)
D = distance to store
w = cost of time ($/hour)
T = time (travel + shopping + checkout)

17. TC = pQ + c(I - A) + a(2D) + wT
p = purchase price
Q = quantity purchased
FOB origin vs. destination
Sales tax
Q = f{family size; vehicle capacity;
location (urban vs. rural); p}

18. TC = pQ + c(I - A) + a(2D) + wT
c = compromise cost
I = ideal item; A = actual item
stock-outs?
consumer risk perceptions
reverse logistics implications

19. TC = pQ + c(I - A) + a(2D) + wT
a = cost of travel ($/mile)
D = distance to store
consumer perceptions of travel costs
retail (car, gas) vs. e-tail (computer, AOL)
reverse logistics implications

20. TC = pQ + c(I - A) + a(2D) + wT
w = cost of time ($/hour)
T = time (travel + shopping + checkout)
consumer perceptions of time
retail vs. e-tail
retailer impacts checkout, but not travel

21. “Home online mantra is ‘logistics’”
“If the key to real-world retailing is location, location, location, then for e-commerce it’s logistics, logistics, logistics.” Carroll (2000)

22. “E-Commerce Success . . Order Fulfillment Chaos”
“Companies are figuring out how to sell goods over the Internet, but getting the goods to the customer is another story. As online orders from consumers and businesses soar past the 2 billion per year mark, Net sellers will be faced with logistics chaos.” Anonymous (1999)

23. B2C e-commerce Markets National markets Local markets XXX
Hour delivery markets
Copacino (2000)

24. Aspinwall’s (1958) Types of Goods

25. Caltagirone (2000)
“the online grocery
business will explode”

26. Murphy (2000) Online Grocery Sales 1998 $ 350,000,000
1998 $ 350,000,000
2002 $3,500,000,000

27. e.g. e-grocers Peapod.com IN BUSINESS Webvan.com BANKRUPT
Groceryworks.com BOUGHT BY SAFEWAY

28. Peapod.com Top-quality products Competitive prices Convenience
First-rate customer service

29. Webvan.com
Selection
Quality
Value
Convenience

30. B2C Logistics Options Consumer pick-up (drive through) Home delivery
Drop-off/pick-up (mini-storage)
Office delivery

31. Consumer pick-up (drive through)
warehouse
home

32. Home delivery
warehouse
home

33. Drop-off/pick-up (mini-storage)
warehouse
mini
home