Electronic commerce logistics in developing countries: The case of online grocery shopping in Jordan

Abstract

Online grocery shopping is one of the Internet business applications that received much attention in the last few years. Online grocery shopping has grown at a fast scale in the developed countries, where customers and retailers have benefited from it. However, this service remains in its infancy stage in developing countries. Groceries are one of the most difficult objects to sell online mainly, because of sensory and delivery issues. Online customers still worry about product quality, and they demand optimum logistical services, convenience, reliability and timely delivery service. Therefore, retailers have to respond to these expectations by developing convenient logistical services while keeping this process cost-efficient as much as possible. The main aim of this research is to design an e-commerce logistical decision support system for grocery retailers in Jordan as a case study of applying online grocery shopping in a developing country. Grocery retailers will be exposed to this model, and will be able to determine the most suitable logistical delivery system in the future. In order to achieve this aim, the designed system incorporates a web ordering system to collect customer orders, embedded map source (Google Maps) and a database system. The collected data then exported to one of the available routing and scheduling online solutions in order to identify, analyze and statistically compare the cost efficiencies of the available delivery alternatives. Moreover, two specially designed questionnaires were distributed among a group of customers and grocery retailers in Jordan, asking about their attitudes towards online grocery shopping and its delivery service. The results from analyzing the questionnaires data statistically were also used as input parameters for the designed system evaluation process. The findings from the questionnaires data statistical analysis indicated that Jordanian customers and retailers have positive attitudes towards online grocery shopping. The results also showed that customers and retailers have serious concerns towards the delivery service in Jordan. Customers are mainly worried about the availability of a suitable delivery service, while retailers are worried about the market size for the delivery service. The findings from implementing and statistically testing the proposed model over three delivery alternatives showed that there are differences between the mean values of the delivery alternatives among their key performance indicators (cost, distance and time). The questionnaire respondents indicated that they both prefer the pickup point service after home delivery for customers and after shop pickup for retailers. Depending on the level of investments that grocery retailers would like to implement and according to the experiment results, it could be concluded that pickup point solution is the best logistical strategy for retailers to start with.