Exploring horizontal collaboration in home delivery operations: a case of Greek grocery retailers

The emergence of online retail channels has reshaped the grocery market rendering home delivery a costly and barely sustainable process. Most grocery retailers fulfil home delivery with proprietary fleets. However, the associated expenses led many retailers to rethink their business model and consider synergies with competitors to implement a sustainable home delivery model. To that end, we propose a horizontal collaborative home delivery model as an operational alternative to reduce distribution costs and improve logistics efficiency. The proposed model is assessed in cooperation with two major Greek grocery retailers. Different operating scenarios using actual home delivery data are tested to evaluate the impact of collaboration and explore if better services, such as shorter time windows, are possible through collaboration. Our results indicate that, on average horizontal collaborative home delivery decreases the number of required routes and travelling time by 5.3% and 10.6%, respectively.