Going Green: The Effect of Green Labels on Delivery Time Slot Choices

41 Pages Posted: 21 Jul 2020

See all articles by Niels Agatz

Niels Agatz

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Yingjie Fan

Leiden University - Leiden Institute of Advanced Computer Science (LIACS)

Daan Stam

Erasmus Research Institute of Management (ERIM)

Date Written: July 21, 2020

Abstract

In this paper, we study the effectiveness of incentives on delivery service time slot choices. In particular, we focus on the use of green labels that specify time slot as environmentally friendly and that intrinsically motivate customers to choose a specific delivery time slot in lieu of price incentives based on extrinsic motivation. We argue this is important since green labels’ intrinsic nature affects costumer choice in fundamentally different ways than price incentives. We conduct two experiments and two simulation studies to study effects of using green labels. Our experimental findings suggest that: (1) green labels are an effective tool to steer shoppers toward a certain delivery option, (2) green labels are more effective for people who are more eco-conscious, (3) green labels remain effective in the presence of price incentives, while price incentives offer little added value beyond that of just green labels, and (4) the effectiveness of green labels versus price discounts remains high when time slots are less appealing (longer). Our simulation findings suggest that green slots, compared to price incentives or no incentives, offer providers a way to effectively steer consumer time slot choices to yield shorter routes, fewer delivery vehicles used, and more per-customer revenue. We thus conclude that steering individuals to select delivery time slots through intrinsic motivation via green labels may be a promising, no-cost direction for (online) retailers and an important topic for research.

Keywords: customer behavior, green label, intrinsic incentive, attended home delivery

Suggested Citation

Agatz, Niels A.H. and Fan, Yingjie and Stam, Daan, Going Green: The Effect of Green Labels on Delivery Time Slot Choices (July 21, 2020). Available at SSRN: https://ssrn.com/abstract=3656982 or http://dx.doi.org/10.2139/ssrn.3656982

Niels A.H. Agatz

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Yingjie Fan (Contact Author)

Leiden University - Leiden Institute of Advanced Computer Science (LIACS) ( email )

Snellius Gebouw, Niels Bohrweg 1
Leiden, 2333 CA
Netherlands

Daan Stam

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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