Uplift modeling and its implications for appointment date prediction in attended home delivery

Abstract

Successful attended home delivery (AHD) is the most important aspect of e-commerce order fulfillment. Prior literature focuses on incentive scheme development for customers' choices of delivery windows and predictive analytics for delivery results, but it is not clear whether the effect of AHD on the appointment date set by customers increases the success rate of AHD. Therefore, we developed an uplift modeling method, PSM-NDML, as a relevant prescriptive analytic tool for AHD on an appointment date, which aims to estimate the causal effect of the by-appointment delivery on the delivery result. PSM-NDML integrates propensity score matching and double machine learning, effectively addressing sample selection bias, low predictive performance, and poor interpretability. Applied to a real-world product delivery dataset of a Chinese logistics company, PSM-NDML achieves superior performance relative to ten other state-of-the-art uplift models in terms of cumulative gain and the Qini coefficient. The predicted responses gained from PSM-NDML are also visually interpreted at the global and local levels, which reveals various managerial insights. In practice, the findings expand managers' understanding of the heterogeneous effects of AHD on appointment dates and provide decision support for logistics companies in the development of home delivery plans.