When Faster Online Delivery Backfires: Examining the Negative Consequences of Split Deliveries

Abstract

ABSTRACT Online retailers assume that customers expect speedy delivery. To ensure that customers receive at least part of the order sooner, they often split deliveries into smaller quantities, spread out over different dates. Yet split deliveries may increase customers’ hassle costs, such that they have to receive multiple deliveries, as well as their perceptions of environmental harms due to more packaging and transportation. Three experiments and a field study test how delivery speed and split (vs. consolidated) deliveries affect key customer outcomes. In the case of split deliveries, faster delivery does not affect customers’ order completion, satisfaction, and word of mouth (Study 1); only when the deliveries are consolidated does faster delivery enhance them, and then only partially. Split deliveries also negatively affect the three outcomes more powerfully when the deliveries are fast (vs. slow) (Study 2). Study 3 reveals that the effects are mediated by perceived hassle costs and environmental impacts. Study 4, using apparel sales transaction data from a U.S. online retailer, shows that split (vs. consolidated) deliveries decrease the number of repeat purchases. These results carry important theoretical implications, as they show that delivery speed matters only under certain conditions and that rather the delivery mode (split vs. consolidated) may be a key unexplored factor associated with customer hassle costs and environmental concerns. The results are practically relevant because they suggest that retailers should not split deliveries to increase delivery speed; instead, shipments of multi-item orders should be consolidated to make receiving them hassle-free with environmentally friendly delivery in order to achieve positive customer outcomes.