Revenue management opportunities for Internet retailers

In this article, we explain how Internet retailers can learn from proven revenue management concepts and use them to reduce costs and enhance service. We focus on attended deliveries as these provide the greatest opportunities and challenges. The key driver is service differentiation. Internet retailers have strong levers at their disposal for actively steering demand, notably the offered delivery time windows and their associated prices. Unlike traditional revenue management, these demand management decisions affect both revenues and costs. This calls for a closer coordination of marketing and operations than current common practice.