I Heart Logistics—Just Don’t Ask Me to Pay For It: Online Shopper Behavior in Response to a Delivery Carrier Upgrade and Subsequent Shipping Charge Increase

Abstract

T he provision of outstanding delivery service is increasingly critical for retailers engaged in e-commerce. As a result, many are interested in switching from their existing carrier to one that is more highly capable in order to better serve their customers. In making this switch, the retailer faces a dilemma: Better carriers cost more, so they will either have to accept a reduction in profit or increase the shipping charge to their customers. While research shows that shoppers recognize certain carriers as superior-and both theory and empirical evidence suggest that people are willing to accept certain cost-justified increases to what they are charged in a transaction-studies also show that online shoppers loathe shipping charges. Thus, what is an e-retailer to do? Through a series of vignette experiments, we examine the question of how online shoppers respond to a shipping charge increase when the retailer switches to a more highly perceived delivery carrier. Our findings show that shoppers are not particularly accepting of the switch, and while they are not likely to complain, resulting purchase intentions are notably low. Alternative strategies for implementing the carrier switch are also explored.

On packaging and product returns in online retail—Mailing boxes or sending signals?

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A Challenge in Our Time: Issues of Race in Supply Chain Management

“…While e-commerce was gaining market share pre-COVID-19, that progress has only accelerated as we continue to contend with the pandemic. In the first article, Tokar et al (2020) seek to answer the pressing question: Are consumers willing to pay more for more reliable delivery service? The authors devise vignette experiments to address this question.…”

Hybrid last mile delivery fleets with crowdsourcing: A systems view of managing the cost‐service trade‐off

“…We thus hold the piece rate (per-task amount) of driver compensation constant within scenarios of the experimental design, but allow it to vary across scenarios. This allows us to focus on the impact of fleet size and mix on cost and service outcomes and not confounding them with customer resistance to delivery price variation (Tokar et al, 2020). The privately owned delivery vehicle is modeled with an agent flowchart that is identical to the right-hand side of Figure 2, with the exception that there is no opportunity for rejecting a delivery task (see Appendix A, Figure A1).…”