Customer behavioral intentions for online purchases: An examination of fulfillment method and customer experience level Kenneth K. Boyer * , G. Tomas M. Hult 1 Eli Broad Graduate School of Management, Michigan State University, East Lansing, MI 48824-1122, USA Received 20 December 2003; received in revised form 11 April 2005; accepted 20 April 2005 Available online 13 June 2005 Abstract This study presents an analysis of the growing market for groceries and other foodstuffs ordered via the internet or telephone for delivery to the customer’s home. This industry has been growing for the past 5 years at greater than 25% per year while the overall market for foodstuffs has been largely stagnant. The research utilizes data from surveys of over 2100 customers of five different home delivery grocers. The analysis utilizes two group variables (customer experience level and order picking method) and five primary constructs (service quality, product quality, product freshness, time-savings and behavioral intentions). The results indicate that customer perceptions of the primary constructs generally improve as they gain experience with this new method of ordering and receiving groceries. Furthermore, the operational choice of picking method is also shown to have a large impact on customer perceptions—in particular, more experienced customers generally rate the primary constructs higher for distribution center (DC)-based picking than for store-based picking. The study provides support for the hypothesis that direct to customer foodstuffs can be of better freshness and quality when picked from a DC because of the ability to shorten the supply chain than from a store. The data suggest that a DC-based picking strategy is viable if grocers can re-shape customer perceptions and master the numerous intricacies of the supply chain. # 2005 Elsevier B.V. All rights reserved. Keywords: Order fulfillment; E-commerce; Grocery home delivery; Service quality; Internet ordering 1. Introduction Groceries are perhaps the most universal commod- ity, thus competition often spurs supermarkets to go to great lengths to develop new technologies and methods of streamlining both their supply chain and their marketing efforts. Supermarkets are well known as a difficult business to compete in with net profit margins typically about 1–2% of sales. The supply chain challenges associated with supermarkets are enormous: the average supermarket carries 30,000 plus SKUs which are in a constant state of flux and prices that must match the competitor down the street. www.elsevier.com/locate/dsw Journal of Operations Management 24 (2006) 124–147 * Corresponding author. Tel.: +1 517 353 6381; fax: +1 517 432 1112. E-mail addresses: boyerk@msu.edu (K.K. Boyer), hult@msu.edu (G.T.M. Hult). 1 Tel.: +1 517 353 4336; fax: +1 517 432 1009. 0272-6963/$ – see front matter # 2005 Elsevier B.V. All rights reserved. doi:10.1016/j.jom.2005.04.002