How to serve online consumers in rural markets: Evidence-based recommendations

Online shopping is growing significantly among rural consumers interested in overcoming product assortment limitations in their local markets. Retailers are taking notice, and some are looking for first-mover-advantage opportunities in rural areas where they see greater potential for growth when compared to saturated urban markets. However, expanding to these areas presents significant and unresolved challenges related to last mile fulfillment caused by low levels of population density as well as other socioeconomic and demographic characteristics. In this article, we present an integrated set of recommendations for online retailers to differentiate strategies to serve rural markets efficiently. To that end, we partnered with an online grocery retailer to examine differences between rural and urban consumers across online shopping preferences that significantly impact fulfillment costs. We draw on those differences and existing knowledge on last mile fulfillment operations to propose a tailored consumer value proposition and operational model for last mile fulfillment in rural markets.