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E-commerce retailers can save money by considering pick failures at stores

While warehouses are built for efficiency in picking, packing, and shipping items, pick failures are much higher in physical stores that are not designed for these purposes for several reasons (e.g., customers moving inventory without tracking, delivery receiving and recording errors, issues with labeling, theft).

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The share of e-commerce retail sales has grown steadily over the last decade. This trend has been driven by retailers with traditional brick-and-mortar stores adopting online channels to connect to customers. In a new study, researchers explored the world of omnichannel retailing — the merging of in-store and online channels in which customers can select from a combination of online and physical channels to place and receive orders.

The study examined top U.S. retailers’ use of omnichannel ship-from-store programs in which retailers use store inventory to deliver orders to homes instead of using a dedicated warehouse or fulfillment center. For the first time, the study incorporated the possibility of fulfillment attempts at stores to fail and identified how such retailers can adopt a policy that leads to significant savings when these effects are considered.

Conducted by researchers at Carnegie Mellon University (CMU) and Onera, Inc., the study is published in Manufacturing & Service Operations Management.

“The rising trend in e-commerce has been accelerated by the COVID-19 pandemic, with online sales jumping from 11.8 percent in the first quarter of 2020 to 16.1 percent in the second quarter,” says Sagnik Das, a former Ph.D. Candidate in Operations Research at CMU’s Tepper School of Business, who led the study. “In omnichannel fulfillment, retailers attempt to minimize costs while fulfilling orders within acceptable time periods.”

Das and his colleagues focused on single-item orders. Typically, online orders are sent to a favorable sequence of locations to be filled in order. Failed trials (i.e., when orders are not filled) are sent to stores later in the order for further attempts until the process reaches a time limit.

“The problem of multistage order fulfillment is an interplay of pick failure — that is, the likelihood that orders will not be filled due to unavailability — at the stores where they may be shipped from, walk-in demand at the stores, and associated shipping costs,” explains R. Ravi, Andris A. Zoltners Professor of Business, and of Operations Research and Computer Science, at CMU’s Tepper School of Business, who co-authored the study.

As stores become an integral part of retailers’ fulfillment strategy in omnichannel ship-from-store programs, the high rate of pick failures at stores becomes a considerable factor in fulfillment costs. While warehouses are built for efficiency in picking, packing, and shipping items, pick failures are much higher in physical stores that are not designed for these purposes for several reasons (e.g., customers moving inventory without tracking, delivery receiving and recording errors, issues with labeling, theft).

Researchers modeled the problem as one of sequencing the stores from which an attempt is made to pick based on anticipated pick failure and ship an order in the most cost-effective way over several stages. To identify the best solution to the fulfillment problem, they modeled pick-failure probabilities as a function of current inventory positions and the result of other online order fulfillment trials.

The study used data on actual orders from several top U.S. retailers that worked with an e-commerce solutions provider to optimize their fulfillment strategies. Researchers proposed three order fulfillment models: one in which physical and online demand were both sparse, another in which physical demand was dense, and another in which both demands were dense. They extended the third model to also incorporate order acceptance decisions along with sequencing the stores from where they are filled once accepted.

By enabling retailers to incorporate the probability of pick failure in their order management systems for ship-from-store programs, the study’s proposed online order-acceptance policies saved omnichannel retailers as much as 22 percent. Specifically, they identified the optimal sequence of stores to try the accepted orders to minimize costs; one of the policies also uses these downstream costs to determine when to shut off the online channel for selling certain items based on current inventory availability levels.

“Our study demonstrates that modeling pick failures along with their interaction with selecting and shipping costs is an important component in optimizing ship-from-store fulfillment costs for large retailers,” says Srinath Sridhar, Chief Technology Officer at Onera, Inc., who co-authored the study.

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Reversible words can lower consumer disbelief in ads

A simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim.

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It’s estimated that consumers experience hundreds if not thousands of marketing messages daily. While the exact number can depend, how much someone believes the message can be more important for marketing success than the number of messages they see. 

A new study reveals that a simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim. Researchers found that when words differ in their “reversability,” or how easily people can think of their opposites, it can trigger different mental processes when consumers evaluate marketing language. 

Imagine the messaging options for a new sunscreen designed specifically for those who like a strong scented product. The first product description reads, “The scent is prominent,” while the second notes, “The scent is intense.” The word “prominent” is uni-polar, meaning people tend to negate it by adding “not” to the original statement.

“Intense,” though, is a bi-polar word, meaning readers can easily come up with its opposite meaning and negate the statement by replacing it with its antonym. In this example, “The scent is mild,” instead of, “The scent is intense.” 

“When people encounter easily reversible words, like ‘intense’, in messages processed as negations (mild), they experience lower confidence in their judgements compared to words that are hard to reverse, like ‘prominent,’” explained Giulia Maimone, a postdoctoral scholar in marketing at the University of Florida Warrington College of Business. 

Across two experiments of more than 1,000 participants, the research demonstrated that this effect occurs because negations of bi-polar, or reversible, words engage a more elaborate cognitive process requiring additional mental effort, resulting in lower confidence of the statement’s truthfulness. 

Based on their findings, the researchers suggest that marketers take this advice when crafting language: for new products, use affirmative statements with easily reversible words, like ‘The scent is intense’ in the sunscreen example, which most consumers will judge as true with high confidence. Importantly, this language would also minimize the confidence of consumers who will be skeptical about the message, as they will process it via a more complex cognitive process that reduces confidence in those consumers’ disbelief. 

“This simple lexical choice could help companies maximize confidence in their desired messaging and minimize confidence among the doubters,” Maimone explained. 

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If you’re a perfectionist at work, your boss’ expectations may matter more than your own, research finds

Help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

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If you’re among the 93% of people who struggle with perfectionism at work, new research suggests that your experience may depend less on your own high standards and more on whether those standards meet your supervisor’s expectations. 

Researchers from the University of Florida Warrington College of Business found that whether perfectionism helps or harms employees depends largely on whether employees’ personal standards align with their supervisors’ expectations. 

Specifically, they looked at the connection between employees’ self-oriented perfectionism, or the expectations of flawlessness they set for themselves, and supervisors’ other-oriented perfectionism, which reflects the extent to which they set excessively high standards for and critically evaluate their employees’ performance. 

Using data from more than 350 employees and about 100 supervisors, the researchers found that perfectionism’s impact depends on whether employees’ standards align with what their supervisors expect and how clearly those expectations are understood. 

When employees’ personal standards are aligned with their supervisors’ expectations, they tend to experience less role ambiguity, meaning they have less uncertainty about the expectations and standards for their role, why those standards matter and the consequences of not meeting them. This clarity in their work is linked to better performance, lower burnout and higher job satisfaction. 

“Problems between employees and their supervisors are more likely to arise when these expectations don’t match,” explained Brian Swider, Beth Ayers McCague Family Professor.

The most difficult situation occurs, Swider and his colleagues found, is when supervisors expect higher levels of perfectionism than employees expect from themselves. In these cases, employees reported greater uncertainty about their roles, along with worse work outcomes including higher burnout and lower job satisfaction.

“If you’re an employee who struggles with perfectionism at work, our findings suggest that understanding your supervisor’s expectations may be just as important as managing your own tendencies towards perfectionism,” Swider said. “Talking to your supervisor about priorities, standards and how your performance will be evaluated can help reduce uncertainty and ensure you both share a clear understanding of what success looks like.”

The researchers have similar recommendations for employers: help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

The researchers also recommend that organizations should consider how employees and supervisors are paired, as mismatched expectations can increase stress, reduce job satisfaction and ultimately impact performance. 

The research, “The influence of employee-supervisor perfectionism (in)congruence on employees: a configurational approach,” is published in Organizational Behavior and Human Decision Processes

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Study shows scaling startups risk increasing gender gaps

Founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

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When startups scale quickly, founders often make hurried hiring decisions that unintentionally disadvantage women, according to new study from the Stockholm School of Economics in Sweden. The study shows how the pressures of rapid growth increase the likelihood that founders rely on mental shortcuts and make biased decisions. 

Drawing on large‑scale Swedish data, the study shows that scaling—when companies hire far more people than their usual growth trend would predict—puts pressure on founders to decide swiftly, which increases the use of mental shortcuts. These shortcuts can activate gender stereotypes, shaping who gets hired and who moves into managerial roles.  

“During those moments of rapid growth, even well‑intentioned leaders can fall back on familiar stereotypes when assessing who they believe is best suited for the role,” says Mohamed Genedy, co-author and Postdoctoral Fellow at the House of Innovation, Stockholm School of Economics. 

Reduced odds of hiring female managers 

His research analyzes more than 31,000 new ventures founded in Sweden between 2004 and 2018. It finds that in male‑led startups, scaling reduces the odds of hiring a woman by about 18 percent, and the odds of appointing a woman to a managerial position by 22 percent.  

These patterns emerge even in a highly gender‑equal national context, making the findings especially noteworthy.  

Crucially, the study reveals that founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

“When founders have experience with structured hiring practices, the gender gaps shrink, and in some cases even reverse,” Genedy says.  

“This shows that getting the basics of HR right early on really pays off. When things start moving fast, founders with HR knowledge are less likely to rely on biased instincts and more likely to hire from a broader talent pool.”  

Prior experience in companies with established HR practices also helps, though less so. It raises the likelihood of hiring women as the new ventures scale, but does not significantly affect managerial appointments. 

Differences persist in female-led ventures 

The study additionally shows that these patterns are not driven by founder gender alone. Even solo female‑led ventures display similar tendencies when scaling, though to a somewhat lesser degree.  

And in female‑dominated industries, scaling increases the hiring of women for regular roles but still reduces the likelihood that women are appointed into managerial positions.  

“When scaling accelerates, cognitive bias kicks in for everyone,” says Mohamed Genedy. “Female founders are not immune to these patterns.”  

Together, these results point to underlying cognitive mechanisms that shape decisions under time pressure.

The study, Scaling with Bias? The role of founders’ HR knowledge and experience in hiring and managerial appointments, was published in Human Resource Management.

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