Revenue management opportunities for Internet retailers

Abstract

In this article, 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. 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.

This is a preview of subscription content, access via your institution.

Figure 1
Figure 2
Figure 3
Figure 4

References

  1. Agatz, N.A.H., Fleischmann, M. and van Nunen, J.A.E.E. (2008) E-fulfillment and multi-channel distribution – a review. European Journal of Operational Research 187 (2): 339–356.

    Article  Google Scholar 

  2. Agatz, N.A.H., Campbell, A.M., Fleischmann, M. and Savelsbergh, M.W.P. (2011) Time slot management in attended home delivery. Transportation Science 45 (3): 435–449.

    Article  Google Scholar 

  3. Boyer, K.K., Frohlich, M.T. and Hult, G.T.M. (2004) Extending the Supply Chain: How Cutting-Edge Companies Bridge the Critical Last Mile into Customers’ Homes. New York: AMACON.

    Google Scholar 

  4. Campbell, A.M. and Savelsbergh, M.W.P. (2005) Decision support for consumer direct grocery initiatives. Transportation Science 39 (3): 313–327.

    Article  Google Scholar 

  5. Campbell, A.M. and Savelsbergh, M. (2006) Incentive schemes for attended home delivery services. Transportation Science 40 (3): 327–341.

    Article  Google Scholar 

  6. Demery, P. (2007) Where's my package? Growing E-retailers steer through a changing delivery scene. September, www.internetretailer.com.

  7. Punakivi, M., Yrjola, H. and Holmstrom, J. (2001) Solving the last mile issue: Reception box or delivery box? International Journal of Physical Distribution & Logistics Management 31 (6): 427–439.

    Article  Google Scholar 

  8. Talluri, K.T. and Van Ryzin, G.J. (2004) The Theory and Practice of Revenue Management. New York: Springer.

    Book  Google Scholar 

  9. US Census Bureau. (2012) E-stats Report.

  10. Xia, L., Monroe, K.B. and Cox, J.L. (2004) The price is unfair! A conceptual framework of price fairness perceptions. Journal of Marketing 68 (4): 1–15.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Niels Agatz.

Additional information

4was professor and chair of decision and information sciences at the Rotterdam School of Management, Erasmus University. His research on e-commerce, closed-loop supply chain management and multi-modal transportation is published in 6 books and more than 150 journal articles. He passed away unexpectedly in May 2010.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Agatz, N., Campbell, A., Fleischmann, M. et al. Revenue management opportunities for Internet retailers. J Revenue Pricing Manag 12, 128–138 (2013). https://doi.org/10.1057/rpm.2012.51

Download citation

Keywords

  • E-fulfilment
  • demand management
  • revenue management
  • home delivery