Abstract
Many online retailers offer free shipping services if customers spend more than a threshold amount. We use a unique transaction-level dataset from a large online retailer to study the impacts of free shipping threshold on consumer shopping behavior across two different online channels, mobile and PC channels. Specifically, we focus on customer order padding behavior, i.e., strategically adding items to a shopping cart to qualify for free shipping. We find that customers are more likely to pad their orders on the PC channel than on the mobile channel. We attribute this impact to the different search cost on the two channels. Furthermore, we find that the way customers pad their orders is different. Specifically, in order to increase basket size, customers on the mobile channel rely more on buying a larger quantity of the same item, while users placing their order on the PC channel prefer to add new products to the shopping cart and/or to purchase higher-priced substitutes.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
