Imagine being asked to deliver a package to a stranger’s home while you’re out holiday shopping. This scenario introduces an emerging concept known as crowdshipping, where non-employees transport items ordered online. Jeff Ohlmann, an associate professor of business analytics at the Tippie College of Business, explores whether crowdshipping could help local businesses compete with retail giants like Amazon.
“Customers expect fast delivery, often within hours,” Ohlmann noted. “But how do businesses that don’t have Amazon’s economies of scale do that without driving costs up?” Ohlmann suggests that customers completing deliveries could be incentivized with gift cards or similar rewards. This method has already been tested by major retailers like Walmart, Target, Home Depot, and Carrefour. While it might seem unusual for a store employee to request such a favor, Ohlmann believes it could be feasible under certain conditions.
In his recent research, Ohlmann examines the proportion of shoppers needed to make crowdshipping viable. His computational models indicate that if just 5% of shoppers agree to extend their journey home by up to 30 minutes for a delivery, the costs and time involved in delivering online orders could be significantly reduced.
However, implementing an in-store shopper delivery service incurs costs as it requires registering and screening shopper/drivers. The challenge lies in cultivating a reliable pool of participants willing to routinely alter their routes home.
“If there isn’t a steady supply of crowdshippers, it may not justify the cost of managing the service,” Ohlmann explained.
To address the potential scarcity of crowdshippers, Ohlmann proposes an alternative: a joint delivery platform that aggregates customer orders from multiple businesses to achieve the scale needed for cost-effective delivery. This concept draws inspiration from shopIN.nyc’s model, which consolidates inventory from various vendors to emulate an Amazon fulfillment center’s product range.
By combining orders from local businesses, such a platform could utilize a mix of dedicated fleets and gig workers available for brief periods, akin to services provided by Uber or DoorDash. This strategy would enable timely deliveries while keeping fleet sizes manageable, especially during peak times.
Media contact: Tom Snee, 319-384-0010 (o); 319-541-8434 (c); tom-snee@uiowa.edu
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