Not-so-speedy delivery: Should retailers use discounts or donations to incentivize consumers to choose delayed delivery?

Abstract

Many retailers feel the pressure to provide increasingly speedy delivery, but the realities of speedy delivery logistics are costly, complicated, and uncertain. In response, retailers have been using discounts to nudge consumers’ voluntary choice of a slower delivery option, but with tepid results. The current research argues that a better incentive exists. Data from six studies demonstrate that changing from a discount (the retailer giving the consumer a $1 reward/coupon) to a donation (the retailer donating $1 to a charity) incentive significantly increases the voluntary choice of delayed delivery. Importantly, the data shows that exchange equity drives this effect. However, two boundary conditions are identified: 1) the retailer communicating a reason for the delayed delivery and 2) the type of product being purchased by the consumer. In sum, the current research provides actionable insights for retailers that offer a delayed delivery option to consumers during checkout and speaks to the current debate about consumers’ desire for speedy delivery.