An exploratory study into the influence of last-mile home delivery innovations on consumer delivery service choices in the parcel and meal delivery markets

Abstract

Innovating the last mile of parcel and meal delivery Logistic service providers are looking for ways to innovate their delivery process in order to optimize their operations, lower operational cost, and to be able to meet growing consumer demands in terms of convenience, predictability, accuracy and flexibility in delivery time and place. Ordering products, produce and meals online, to be delivered at your door, is becoming increasingly common. This leads to an increase in demand for home deliveries. From the operational cost perspective of logistic service providers (LSP), the so called last mile of the delivery is very expensive. The last mile is the very last part of the journey. For parcel delivery, this is typically the trip from the LSP’s distribution centre to the consumer home. LSP’s are contracted to deliver parcels to the consumer. Therefore, retailers are in fact the customer from a LSP’s perspective. Improving cost and quality of delivery services is important for LSP’s for two reasons. Firstly, to lower operational cost in order to improve their market position. Secondly, to leverage a better consumer experience to the retailers. There are innovations – often involving aspects of automation – which may optimize this last mile, therewith potentially reducing the operational cost of delivery and enhancing flexibility and quality for the consumers, in theory making them interesting investments. This research focusses on the consumer side of this topic, and looks into their preferences by means of discrete choice modelling in order to determine the consumer value of these innovations. Preferences can be specific to a type of commodity. For example, different trade-offs may be made when ordering a book rather than ordering a pizza. To capture these differences to a certain extent, this research takes into consideration parcel delivery and meal delivery.Transport, Infrastructure and Logistic