Nudging Green-but-Slow Shipping Choices in Online Retail

Abstract

Faster e-commerce fulfillment often comes at a cost to the environment due to energy-intensive transportation modes and more frequent, less consolidated, last-mile deliveries. While faced with these environmental implications, most retailers feel pressure to provide fast fulfillment to stay competitive. But, what if consumers could be nudged to voluntarily choose a green-but-slow shipping option of their own accord? In practice, a variety of information strategies are used to nudge such decisions, but it remains unclear which strategies best fit a given logistical context and why. This study examines these questions in two logistical contexts, each involving a different type of process change to support green-but-slow shipping: shipping mode and order consolidation. Drawing on behavioral research and industry practices, we develop a theory for how customers perceive information surrounding shipping options, and then identify and test the effect of a comprehensive set of information strategies (i.e., Process, Green Label, Green Process, and Green Outcome) through a series of controlled experiments involving a total of 3,800 participants. Our findings support our theory that the effectiveness of these strategies depends on their ability to enhance customer perceptions related to key delivery stakeholders, including the self, society, and retailer. Additionally, we examine the role of financial incentives in boosting the effectiveness of these strategies. The results offer clear guidance to retailers on the most effective approaches to promote green-but-slow shipping in different logistical contexts.

Keywords: green shipping, online retail, delivery speed, sustainable logistics, behavioral operations