Exploring the Effects of Last-Mile Logistics Services on Online Store Brand Equity
Zoom Research Seminar
Past event — 8 December 2021
Felix Max Bergmann
Research Associate and PhD Candidate
Retail e-commerce is expanding rapidly, and its global market volume is projected to reach $5.55 trillion in 2022. In addition, the expectations of receivers are growing with regards to individualized deliveries, shorter delivery lead times, a wider range of return options, and narrower delivery or pickup time windows. These developments are driving the demand for increasingly complex and expensive urban logistics services. However, online retailers are unable to offer these services on a cost-covering basis due to the fierce competition and high price sensitivity among customers. In our research, we therefore investigate whether offering innovative logistics services entails additional marketing-related effects that can ultimately offset the high costs. Specifically, we examine the relationship between last-mile logistics services and customer-based brand equity (CBBE) and a number of moderating factors. To this end, we conduct an online experiment with 1,000 participants. The participants are supposed to shop running shoes from an artificial retail brand and go through the entire shopping process in the retailer's online store. Upon checkout, the participants are randomly assigned to either a control group with only a basic shipping service or to one of three treatment groups that additionally include express, green and build-your-own services. Subsequently, we measure each respondent's CBBE towards the artificial retail brand by means of an online survey. Our analyses indeed reveal a statistically significant relationship between the different last-mile logistics service levels and CBBE. We thus show that it is insufficient to view logistics services solely as a cost factor. Rather, these services have a positive influence on customer loyalty, perceived brand quality and brand associations, which translates to a positive impact on financial metrics in the long term.
Felix Bergmann is a research associate and PhD candidate at the Chair of Logistics Management (Prof. Stephan M. Wagner) at ETH Zürich. Felix’s research interests are centered around the broad topic of urban last-mile logistics: For instance, he conducts numerical experiments to explore the route efficiency trade-offs that emerge from combining first-mile pickup and last-mile delivery operations in an urban distribution system, specifically considering vehicle capacity- and time window-constraints. Further, in two empirical studies, Felix approaches the topic from a marketing perspective: First, he assesses the influence of various last-mile logistics services in e-commerce on the purchasing decisions of online customers. Second, Prof. Dr. Alexander Himme and Felix teamed up to explore possible brand equity-effects of last-mile logistics services. Felix holds B.Sc. and M.Sc. degrees in industrial engineering from RWTH Aachen. Before starting his PhD studies, he spent a year at MIT’s Megacity Logistics Lab where he wrote his Master’s Thesis and worked as a research assistant.