Study finds donations more effective than discounts for delayed delivery

A new study finds consumers are more willing to accept slower delivery from retailers when ordering products online if the retailers agree to donate to a charitable cause. The finding suggests a path forward for companies that hope to ease stresses associated with providing the fastest possible delivery times. The paper, “Not-So-Speedy Delivery: Should Retailers Use Discounts or Donations to Incentivize Consumers to Choose Delayed Delivery?,” is published in the Journal of Retailing.

“Retailers feel pressure to provide quick delivery to consumers, but the logistics of delivering purchases quickly can be costly and complicated—and may be subject to disruptions outside of the retailer’s control,” says Stefanie Robinson, co-author of the study.

“To convince consumers to opt for slower delivery options, some retailers have adopted programs that offer consumers financial incentives. For example, you may get $1 off if you choose the three-day delivery option instead of the overnight delivery option.”

“We wanted to know if a better incentive exists for getting consumers to opt for slower deliveries,” says Robinson, who is an associate professor of marketing in North Carolina State University’s Poole College of Management. “Specifically, our focus was on comparing a discount incentive to something new—a donation incentive which involves the retailer making a $1 donation to a charity.”

To learn which incentives consumers found most appealing, the researchers conducted a series of six studies that cumulatively involved more than 2,000 study participants. The key finding was that consumers were more likely to opt for the slow delivery option if the company made a donation to a charity rather than a financial reward that benefited the consumer, such as a discount on their purchase. This was true across demographic groups, regardless of gender, income level and so on.

“Our findings suggest that consumers view donations to be more of a fair trade-off for delayed delivery than other financial incentives,” Robinson says.

The researchers found that two other factors can also come into play.

“First, we found that people’s willingness to accept the discount option—rather than the donation incentive—went up considerably if the retailer also explained why they wanted consumers to select a delayed delivery,” Robinson says. “For example, if a retailer said the delayed delivery option reduced the environmental effects, people were just as willing to accept the delay with the discount incentive as they were to accept the delay with the donation incentive.”

Second, the donation incentive did not improve people’s willingness to accept a delayed delivery if the items being delivered were utilitarian.

“For example, if someone needed batteries, the donation incentive did not outperform the discount incentive,” Robinson says. “In other words, if it’s something people actually need, it doesn’t matter which incentive the retailer offers.

“We think these findings offer practical, real-world guidance for retailers,” says Robinson. “There are times when retailers can’t offer speedy delivery, and this paper shows that offering a donation incentive can motivate consumers to opt for slower delivery options.”

The corresponding author of the study is Katie Kelting, an associate professor of marketing at Saint Louis University. The paper was co-authored by Stacy Wood, the Langdon Distinguished University Professor of Marketing in NC State’s Poole College of Management.