In attended home delivery, it is common for the retailer to offer the customer a menu of delivery time windows to choose from. The customers’ delivery time window choices determine the efficiency of the associated delivery operations. That is, routes are most efficient when customers in the same zip-codes are clustered in the same time windows. It is possible to increase the efficiency of the delivery operations by offering incentives to steer customers towards certain cost-efficient delivery time windows. Many e-grocers provide discount on the delivery fees to encourage the selection of certain time windows. These organizations extrinsically motivate customers by using these incentives. Interestingly, a few internet grocers, including Ocado and Peapod, are appealing to the customers’ environmental concerns by indicating which time windows would minimize fuel consumption for their order. Instead of external financial rewards, these incentives stimulate behavior that may be internally rewarding to the individual. So far, there have been no systematic studies exploring the effectiveness of such ‘green’ incentives. We present the results of several experiments that test the effectiveness of non-price ‘green’ incentives that appeal to the customer’s intrinsic motivation to behave environmentally responsibly by choosing efficient delivery time windows.
Niels Agatz is an Associate Professor at the Rotterdam School of Management, Erasmus University, where he also serves as the academic director of the MSc program in Supply Chain Management. His research focusses on the planning and control of (e-)retail operations and logistics systems. He is particularly interested in new applications in last-mile delivery, e-fulfillment, ridesharing and on-demand transportation. His research has been published in leading international journals as Transportation Science and Transportation Research Part B. Niels’ research is often conducted in close collaboration with practitioners. Before joining the Rotterdam School of Management, he worked as a postdoctoral researcher at the School of Industrial Engineering of the Georgia Institute of Technology. Niels Agatz obtained his MSc in Industrial Engineering from the Eindhoven University of Technology and his PhD from the Rotterdam School of Management, Erasmus University.
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