Consumer preferences for parcel delivery methods

Abstract

In the Netherlands, as in many other densely populated countries, home delivery is the dominant way of delivering online ordered parcels. This is mainly because big retail companies offer this delivery option for free. Due to the expansion of e-commerce, home delivery that typically makes use of diesel vans puts increasing pressure on logistics service providers, their employees, traffic, and the environment. Increased use of service points or parcel lockers could relieve some of this pressure, but these delivery alternatives are barely used by Dutch consumers. The goal of this paper is to better understand how consumers can be stimulated to use pick-up points and in particular parcel lockers. To achieve this goal, a stated choice experiment was conducted among Dutch e-commerce consumers, in which they made choices between home delivery, service point, and parcel locker alternatives that systematically varied in costs, delivery moment, and distance. The application of the model to predict choices under a number of scenarios makes clear that even a small increase in home delivery costs together with an expansion of parcel lockers that decreases the distance to the parcel lockers, could severely reduce the choice for home delivery: home delivery is predicted to reduce from 71% to only 7%. This suggests that there is potential for breaking through the dominance of home delivery.