Examining the Retail Delivery Choice Behavior in a Technology-Aware Market

Abstract

This study aims to provide valuable insights into consumer preferences for delivery services in online shopping in Chile. The COVID-19 pandemic has accelerated the evolution of delivery and logistics services, leading to increased competition among online stores. Chile, with its highly digitally enabled population and a competitive landscape of online retailers, serves as an ideal reference case for Latin America. By analyzing key delivery attributes such as delivery time, order arrival time range, compensation policies for delivery delays, and delivery prices, we offer valuable insights into consumer behavior. These insights will, in turn, inform the formulation of effective strategies within the online shopping industry. We examine the following aspects: (a) The willingness of consumers to pay for the service attributes; (b) The relative importance assigned to these attributes by consumers; and (c) The relationship between consumer preferences and socioeconomic characteristics. Using Multinomial Logit Models and a database from a Discrete Choice Experiment, we have discovered that the most significant attributes of delivery service are the time until product arrival and the existence of compensation in case of delivery delays. Additionally, we found that consumers are willing to pay more for the same delivery service if the product is large, as large products generally have higher prices. Furthermore, we observed that delivery time preferences vary by gender and for small products, and price sensitivity varies according to educational level, household size, and socioeconomic status. To the best of our knowledge, no previous research of this kind has been conducted for Chile.