Study shows that online shoppers value convenience to speed when purchasing

The scientific article was published in the MIT Sloan Management Review (U.S.A.), and co-authored by Pedro Amorim, researcher at INESC TEC’s Centre for Industrial Engineering and Management (CEGI).

Online purchases skyrocketed due to the COVID-19 pandemic. In 2020, online buying accounted for 18% of global retail sales. As a result, most retailers are investing in multi-channel strategies to adapt to this change. There is a Portuguese researcher behind the study that allowed us to understand consumer preferences when shopping online.

Pedro Amorim, coordinator of CEGI, joined Sara Martins, also a researcher at INESC TEC, and Nicole DeHoratius, from the University of Chicago Booth School of Business, and analysed the behaviour of consumers in the grocery retail area, exploring more than 150 000 transactions. The study was published by MIT Sloan Management Review (U.S.A.), a renowned independent magazine focusing on research and digital platforms for business leaders, and is available here.

The study shows that deliveries with a specific day and time, selected by the consumer, are more valued than the ones made in shorter periods of time. It also concludes that consumers are even willing to wait longer for a delivery, as long as they can receive the product on the most convenient day of the week.

Moreover, consumers prefer receiving their orders on Thursdays or Fridays, and not during the weekend. Customer loyalty and the size of their “basket” are also attributes valued by consumers – for example, frequent customers are willing to pay more for the same delivery attributes, when compared to less loyal customers; customers with larger “baskets” are willing to pay double the delivery fee to improve delivery-window precision.

Pedro Amorim, who is also a professor at the Faculty of Engineering of the University of Porto (FEUP), acknowledged that “precision rather than speed is fundamental. Executing a strategy dedicated to speed alone can be expensive, particularly for grocery retailers, whose margins are notoriously thin. There is a less costly option worth considering: analysing operational data about delivery patterns”.

Researchers suggest that grocery retailers should adopt a strategy that combines speed, accuracy and flexibility. It is essential to analyse consumer behaviour, adapt order delivery strategies according to customer segments and communicate the main benefits over competitors. The findings of this study can also be applied to other retailers that provide home delivery services, such as sellers of furniture, appliances and other durable goods.

The researchers mentioned in this news piece are associated with INESC TEC and UP-FEUP.