Research Projects

Stop the Video

Research Projects

METRANS
STATUS: In Progress YEAR: 2015 TOPIC AREA: Sustainability, energy, and health CENTER: MetroFreight

Home-Based Shopping Patterns

Project Summary

Rapid advances in information and communications technology (ICT) and other related high-technologies, demographic changes such as the increase in one-person households and the growth of aging society, intensified urbanization, and other socioeconomic factors have led to newly developed sales and consumption patterns.  E-commerce accounts for this new change in consumer and producer behavior. Korea has experienced a remarkably rapid growth in e-commerce during the past 10 years even though the whole sales in commerce  decreased during that time.  In fact, the total sales of commerce had increased by 2.5 billion dollars between 2014 and 2016.  Out of this sales increase, 1.3 billion dollars was produced from online shopping sales, which explain around 63% of the whole sales increase in commerce for the two years in Korea. As e-commerce has developed, more diversified kinds of goods have traded through online shopping using the Web and Apps. As a result, new and various logistics service needs – rapid, convenient, inexpensive, and customized, etc. – have been generated.

The main objective of this project is to explore the changing patterns of home-based consumption within an urban area in Korea.  The research also investigates how the producers have adapted their logistics strategies to meet their consumers’ new demand.

Current Status

This project started to analyze the structure of Korean commerce in terms of total sales, major products, and unit price at first by comparing the three: (1) total commerce, (2) total online shopping, and (3) mobile shopping only out of the total online shopping. This first step tells us several facts. Online shopping sales have kept increasing so as to contribute a large part of the whole commerce growth.  E-commerce sales, which exclude any sales of services such as ticketing for travel, performance, and any other services that do not generate freight transportation, have kept growing. In particular, mobile shopping sales are growing very fast and its unit sales per transaction are also increasing. Its sales are not only limited to durable goods but also extend to a variety of nondurable goods.

 

Figure 1  e-commerce in Korea (Nov. 2014 to Feb. 2017)

Several interviews and data collections from the major retailers and producers show the changing logistics service needs of their customers as their consumption behavior has changed. More and more people order their daily necessities including groceries, food and its ingredients, home appliances and furniture, etc. using their computers and smartphones without visiting the stores directly. These changing home-based consumption patterns have developed the needs for seamless purchase processes including omni-channel supply chain management, faster and on-demand but inexpensive logistics services and fulfillment services.  As a result, retailers and producers are trying to respond to these new demands by developing a new logistics services business model, implementing on-demand logistics services platforms, utilizing new delivery modes such as motorcycles, and relocating their warehouses and fulfillment centers.

Next Step

In order to explore the changing patterns of home-based consumption more closely, various case studies are in progress using actual consumers’ shopping behavior data collected: examples are grocery shopping, food delivery, and other general goods shopping including clothing, books, etc.

P.I. NAME & ADDRESS

Sangbeom Seo
Research Fellow; Director, Division for Logistics Policy and Industry
315, Goyangdaero, Ilsanseo-gu
Goyang-si, Gyeonggi-do 411-701
South Korea
[email protected]