BUS602: Marketing Management

Our structured literature review showed that physical product flows for forward and backward distribution in OC retailing are not yet systematically studied. Hence, the research questions target to identify and systematize distribution designs, key issues, and contextual factors. The research questions, therefore, focus on an open and unexplored area. Exploratory studies are appropriate for such conditions.

The primary source for our exploratory study were semi-structured interviews with OC retailers as suggested, e.g., by Trautrims et al. Quantitative market data, reports, and discussion with further experts in the field served as a source of triangulation for the ideas that emerged from the qualitative data. To meet the criteria for trustworthiness during data collection, we used multiple approaches as suggested by Lincoln and Guba and detailed below. We adopted an interpretive research approach, which, in the interpretation of concepts in a first-order analysis, gives voice to the managers actually designing OC distribution concepts. The insider's point of view was the foundation of our inductive analysis. Following this, we as researchers took on the task of formulating deeper, more theoretical, and conceptual second-order interpretations.

Section 4.1 details the methods applied for data collection. Section 4.2 then presents how we derived the results from the data collected.

Data collection

First, we provide details about our semi-structured interviews, before we shortly portray our sources of triangulation.

Semi-structured interviews

We selected a semi-structured research design based on face-to-face and direct communication with executives. Expert interviews are a suitable instrument for data collection because the experts' knowledge of the design, implementation, and control of solutions stems from their position within the companies. The aim of these exploratory discussions was to gather information and systematize structures without formulating restrictive hypotheses in advance. Knowledge was gained in a recursive dialogue between researchers and reflective practitioners.

Prior to collecting primary data, we used pilot interviews with consultants to understand the current status and challenges in OC distribution. The main goal of these interviews was to become familiar with the key change issues. We selected this particular group for pilot interviews because of its lead role in developing distribution and return concepts.

Following the pilot interviews, formal interviews were conducted over a six-month period until we reached theoretical saturation (see details on sample below). The interview guide used for the initial round of interviews was based on the product flow from the retailer to the customer and vice versa, tested and refined in initial pretest interviews. Questions could be asked at any time to allow the conversation to flow naturally. The interviews lasted between 60 and 120 minutes. The anonymity of participants was protected through a written agreement and did not allow interviews to be recorded. Field notes were, therefore, written during and immediately after the interviews.

To meet the criteria for trustworthiness, we interviewed in teams and discussed and checked the information gathered. All interviews were conducted by two of three interviewers, one of whom attended all the interviews to guarantee comparability. As one interviewer handled the questions, the other recorded notes. This enabled us to interact personally with informants, while the note-taker retained a different, more distant view. Given that the interviews relied on multiple informants from different companies, however, no informant's interpretation dominated the study. The interviewers met regularly with other members of the research team to debrief them on preliminary findings. This means that team members not involved in the interviews were able to probe for further insights, suggest means of gaining additional clarification, recommend next steps, and challenge the interviewers by suggesting alternatives for tentative initial findings.

Challenges and options of distribution concepts were discussed from multiple perspectives. The initial interviews focused on structures of OC distribution systems, strategic issues, and most recent developments in the market. As nine themes (see data analysis) emerged from the data, we focused the interviews on investigating those themes in greater depth, which facilitated our effort to uncover both patterns and differences across retailers and to identify relationships among concepts.

During the sampling process we first identified potential participating companies, before identifying interviewees from these companies. We used theoretical sampling in four steps until we reached preliminary theoretical saturation with regard to insights from additional interviews. The target retailers had to fulfill four criteria: (1) OC retailers, (2) operating in non-food retailing, (3) with significant experience in the business (i.e., at least one year in distance retailing via an online shop and at least five years in bricks-and-mortar business), and (4) of a significant size in terms of sales and number of outlets (i.e., at least EUR 200 m. annual sales and at least ten outlets in German-speaking countries). The scope of the investigation covers OC retailers only. Retailers are referred to as belonging to OC retailing if they have a distance sales channel as well as bricks-and-mortar outlets. Furthermore, the retailers had to have been active at least for one year in both channels. OC retailing is more advanced among non-food retailers. To get a broad understanding and avoid looking only at product-specific phenomena, we invited non-food retailers across multiple sectors, namely fashion, consumer electronics, DIY, and specialty retailers. The challenges for integrating on- and offline distribution concepts are especially relevant for large retailers with established distribution networks and economies of scale in this area. The company sample was, therefore, derived based on the latest industry rankings of official statistical data, which use annual sales as a criterion.

We started by inviting the top 25 retailers with OC business. Ten of these 25 participated. After the interviews, we further reviewed practitioner-oriented journals to identify retailers who published recent changes in their OC business models. We invited ten additional retailers who met the above criteria and had not yet been included. Three of ten agreed to participate. Because we were still gaining more insights from every interview after an intermediate data analysis, we assumed that we had not yet reached saturation level in the data, and invited further top 25 OC retailers from sector-specific rankings. We also wanted to balance our sample better in terms of origin (distance or bricks-and-mortar channel as the first channel), experience in OC logistics (more than five years vs. less experience), and across non-food sectors. This resulted in another 15 retailers that participated. The coding and categorization did not significantly change further during the completion and analysis of this sample set, especially with the last retailers in this set. No further advances, advantages or requirements were gained for the various concepts in OC distribution. We were, therefore, able to identify clear patterns and replicate the development of the theory, but not extend it further.

A participation rate of approximately 50 % was achieved, with 28 retailers taking part in total. These included 14 retailers from fashion, two from consumer electronics, five from the DIY sector, and seven other retailers (e.g., specialized retailers, department stores). The participating retailers have their headquarters in a German-speaking country and operate in 21 countries on average. The retailers' total annual sales average EUR 5.9 bn, with a maximum of more than EUR 40 bn and a minimum of EUR 200 m. In Germany, participants' sales represent about 40% of total sales in the OC fashion market, about 60 % in OC consumer electronics and almost the entire market for DIYs. The companies interviewed have been active in OC retailing - including operating an online shop - for between one and more than ten years.

During the interviews we learned that logistics service providers also play a key role in OC distribution. Therefore, we expanded the scope and invited the top 10 service providers in retail logistics, of which five participated.

We assume that people constructing their organizational realities are "knowledgeable agents". Experts in organizations know what they want to achieve with their actions and can explain their intentions. The consequence of this assumption for conducting research is profound. The interviews were conducted exclusively with board members, managing directors, and division managers, who have a holistic view of the distribution structures. Current actions are strategic decisions in this context. Therefore, it seems appropriate to use top managers as knowledgeable agents.

In total, we interviewed 43 top managers from the first and second hierarchy level with responsibility for supply chain management (27 managers), e-commerce (eight managers), or cross-functional units (eight managers). The selection of experts was based on the fact that they are informed and experienced in OC forward and backward distribution, i.e., they have been directly involved in the planning and execution of such systems.

Primary market data

We also amassed market data relating to OC logistics for triangulation. We collected primary data from 100 large retailers' websites and their offerings in OC distribution. Other documents included strategy statements, newsletters, performance reports, and articles in professional journals. We used the documents as a secondary data source, providing insight into the context and for substantiating constructs. These documents also helped to facilitate discussions with the informants about the themes that emerged from the data. Although this information was not extensively used, it helped us to appreciate the context in which systems are enacted.

Data analysis

Our inductive analysis is neither driven by deductive logic nor follows a strict grounded theory approach, because "data is inextricably fused with theory". We cycled among data, emerging theory, and relevant literature to develop a deeper knowledge of OC forward and backward distribution systems. Our approach relies on continuous comparison of data and theory development and the overlap of data collection and data analysis. During the analysis, the transcripts were rephrased, reflected, and compared to create typologies.

We used two major methods to ensure the trustworthiness of our data analysis. First, we used three distinct coders, compared codes with each other, and reached a sufficient degree of similarity. We further used two outside coders to assess our coding scheme independently to increase confidence in our assignment of codes to appropriate categories. Disagreements, either between the researchers or between the researchers and the outside coders, were discussed until a consensus was achieved. This additional step helped to ensure the repeatability of our findings and the emergent theoretical framework. Second, we triangulated the emerging findings with literature and further market data and completed "member checks". During this phase we leveraged related literature from retail forward and backward distribution (both bricks-and-mortar and e-commerce) to refine articulation and emergent concepts and relationships. Furthermore, we conducted "member checks" with our interviewees to gain confidence that the emergent theoretical framework was sensible as well as realistic and validated by those in charge. We developed an intermediate report of our findings, shared this with all participants, and asked them for feedback, which was also incorporated. Early results have additionally been discussed at multiple research conferences.

Our initial approach was a first-order analysis involving a thorough coding of the interview and meeting transcripts. We developed a detailed coding scheme consisting of 51 first-order codes in the informants' language and consolidated them into 18 informant-centric categories. Using the constant comparative method, we repeatedly compared data over time and across interviews to discern the major concepts of interest. We relied on the retailers' own language as the source of our concept labels wherever possible. We used short phrases expressed in first-order terms in cases where a code was not directly available or violated confidentiality agreements. We used an appropriate software application designed to aid in coding and analyzing text throughout the entire process.

To discern themes that might constitute a basis for developing a theory, we used a structured second-order analysis to view the data at a higher level of theoretical abstraction. We again used constant comparison techniques and the relationship between second- and first-order themes. After again examining category nesting and overlaps, nine second-order themes emerged: fields of action in OC forward and backward distribution, level of network integration, development plans for network configuration, forward distribution structure, qualitative criteria in forward distribution, development plans for forward distribution, return processes, qualitative criteria for return structures, and development plans for return processes.

In the third stage of our analysis, we grouped our major themes into aggregated dimensions. This process involved the relatively straightforward task of examining the relationships among first-order concepts and second-order themes and distilling them into a set of more simplified, complementary groupings. Three aggregate dimensions resulted: Excellence in OC distribution, forward distribution (containing a typology and related archetypes for OC dispatching locations and destination concepts), and backward distribution (containing a typology and associated OC return modes and processing locations).

This also provides us with a structure for our findings in the remainder of the paper, summarized in Fig. 1. Section 5, therefore, answers RQ1 by identifying the major issues encountered when striving for excellence in logistics services and costs in OC distribution. This leads to a discussion of distribution typologies for forward and backward distribution in Sects. 6 and 7. Section 6.1 answers RQ2 by developing a typology for forward distribution. This builds the framework required for investigating RQ3 in relation to dispatching locations (Sect. 6.2) and destination concepts (Sect. 6.3) in forward distribution. Section 7 first develops a typology for backward distribution in the same way (Sect. 7.1) and then investigates return modes and return processes (Sects. 7.2 and 7.3). As a result, the main sections analyze the prevalent archetypes for these areas, investigate the pros and cons of these archetypes, and develop a typology for forward and backward logistics in OC distribution.

Fig. 1 Overview of areas in omni-channel forward and backward distribution systems