The Need for Speed: Decoding Linkages between Fulfillment Time and Customer Satisfaction to Improve Online Food Delivery Performance

<p><i>Problem definition:With a boost in digital access, online food delivery (OFD) solutions from cloud kitchens have grown&nbsp;</i><i>significantly in recent times. This innovative business model brings unprecedented convenience and responsiveness to the&nbsp;</i><i>customers. While OFD platforms optimize customer experience by better matching riders with customers and reducing&nbsp;</i><i>order fulfillment times with better staffing, there is a limited understanding about the relationship between fulfillment speed&nbsp;</i><i>and customer satisfaction ratings. Although in an e-commerce setting, studies have shown that better order fulfillment t</i><i>imes improve sales via logistics ratings, it is unclear if such a mechanism is always true for a cloud kitchen setting. The&nbsp;</i><i>cloud kitchen setting provides a unique context for studying a variety of brands and dish types offered to customers from&nbsp;</i><i>a single kitchen. Different from traditional e-commerce products, where speedy delivery always brings customer delight -</i><i>good food preparation and food freshness are core to customer satisfaction in OFD platforms. Methodology: We partner&nbsp;</i><i>with a large cloud kitchen company and use large-scale transaction data from two cities to empirically examine the impact&nbsp;</i><i>of fulfillment time on customer food ratings. Our results reveal that a delay of 10-minutes in fulfillment is associated with&nbsp;</i><i>a 14.4% decrease in the likelihood of receiving a higher customer food rating.We find evidence supporting the idea that in&nbsp;</i><i>an online food delivery context, perceived quality also holds importance along with timeliness, such that being too early&nbsp;</i><i>can be detrimental. To further examine this effect, we complement our analysis with a survey experiment conducted in a&nbsp;</i><i>controlled setting. Using insights from the empirical model as an input, we conduct post-hoc simulations to demonstrate&nbsp;</i><i>how operational strategies such as delivery priority and workload balancing can improve fulfillment time driven customer&nbsp;</i><i>satisfaction. Managerial implications: Our findings enable food service managers to better understand the operational&nbsp;</i><i>consequences of fulfillment time decisions on customer satisfaction. In addition, by learning the heterogeneous effects of&nbsp;</i><i>fulfillment time based on order characteristics and customer demographics, managers can design effective interventions&nbsp;</i><i>to improve customer ratings.</i></p>