The “next day, free delivery” myth unravelled

Abstract

PurposeCurrently, it is unclear how omnichannel retailers can create a last mile offer that is both attractive and sustainable from an economic and environmental point of view. The purpose of this paper is to explore to which extent consumers are willing to adopt last mile options that are more sustainable and how these options should be composed to remain attractive.Design/methodology/approachTo this end, the authors surveyed a representative sample of Belgian consumers, using choice-based conjoint experiments, and analysed their preferences structures.FindingsConsumers’ preference goes out to free, next day delivery to an address of choice, on regular office hours during the week. However, when free delivery and return are offered, consumers are willing to collect their orders themselves or wait longer for their orders to arrive.Practical implicationsThe research findings are important for retailers that (plan to) operate an omnichannel model. For omnichannel retailers with a dense store network, the results indicate that consumers accept their store network as pick-up and return locations, allowing retailers to create a more efficient and sustainable supply chain in which their online and offline activities can be combined.Originality/valueThe research findings contribute to current literature and practice by combining “planet” and “profit” components of sustainability in last mile transport and applying it in the novel omnichannel environment.