Distribution Channels for E-commerce

Distribution Channels for E-commerce

The growth of e-commerce has incited the setting of various distribution channels for home deliveries:

  • Store purchase. Represents the conventional shopping trip to a retail outlet which is supplied by truck deliveries from regional distribution centers (DC).
  • Store delivery. Involves home deliveries originating from a store location for goods that could have been purchased in store or ordered online. This is particularly the case for bulky (appliances) or perishable (food) purchases.
  • Home delivery. An online order processed by a fulfillment center (FC) and delivered to the home address of the purchaser (at times to an alternative location such as the workplace). This represents the conventional online purchase delivery chain.
  • Pick up. A series of options for deliveries that are an alternative to home deliveries. Locker boxes or collection points offer lower cost alternatives than direct home deliveries and the option to pick up a parcel at a time that matches better the consignee’s availability. ‘Click-and-collect’ schemes are emerging pickup strategies implemented by several grocers where online orders are picked up at a designated area such as the parking lot adjacent to the grocery store.

In the context where there is increasing congestion and volumes of deliveries, the setting of urban distribution centers becomes a value proposition. For instance, sortation centers are emerging as intermediary locations to assign deliveries to specific areas.