American Marketing Association reposted this
A new Journal of Marketing study is the first to examine the effects of online retailers building their own delivery service (ODS), finding that ODS increases customers’ monthly spending by 7.8%, among other benefits ⬇ Last-mile home delivery is now a priority for many online retailers, who are investing billions of dollars to build their ODS and deliver products to customers’ homes via their own logistics network. In 2023, Amazon delivered 5.9 billion packages—approximately two-thirds of its packages delivered in the U.S.—through its ODS. How does the shift to ODS affect customers’ behaviors and online retailers’ sales performance? When should online retailers venture beyond their core business of retailing to offer ODS, and why? The study find that ODS increases customers’ monthly spending by 7.8% and grows city-level sales by 11.9%. ODS has greater value for markets with lower trust levels, infrequent customers, high-risk product categories, and consumers who prefer the focal retailer (versus third-party sellers). The study indicates that ODS improves delivery quality and customer trust, which together increase customers’ monthly spending, purchase frequency, and the number of items ordered. Check out this research recap for the lessons #CMOs can learn from this study: https://lnkd.in/gGHEVkHn By Banggang Wu, Yubo Chen, and Prasad A. Naik #logistics #delivery #onlineretail #marketing #marketingresearch