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Thesis Defense
Shipping strategies for
Online retailers
Ke Zhou - S3262383
Supervisor: Bijmolt Tammo
Research statement
Problem
1. Free shipping policy can motivate customers to purchase. However this will also significantly increase cost.
2. Threshold free shipping policy can reduce the cost to some extent. Whereas, any charges for shipping can have significantly
negative influence on purchase intention
Question
Which shipping strategy is the optimal shipping strategy for online retailers?
Research Hypothesis
The effect of shipping strategies on customer purchase behaviors (i.e. basket size and value), product returns and company performance (i.e. customer acquisition and retention, sales and revenue).
Objective
The primary goal of our study is to investigate the effectiveness of the shipping fee strategy and the threshold free
Theoretical Model
Control variables in H3, H4, H7: Gender, Age,
customers status(new or current)
© CIC | 5
Data
Setting
: Collected from a leading online retailer in the Netherlands.
Shipping fee: different shipping cost according to item types
Threshold free shipping: free shipping when the total value of an order exceeds 20 euros.
1 Session le
vel data (Raw data)
Discussion -- Implication
●
managers would consider implementing the threshold free shipping policy rather
than the shipping fee strategy.
○
Smaller basket size, value per order○
High customer retention rate more sales and revenues●
Managers would consider conducting promotion campaigns periodically
especially when the threshold free shipping strategy is applied.
○ Larger basket size, basket value, sales and revenues
○ with the effect of promotion, the difference between the threshold free shipping strategy vs shipping fee strategy regarding the percentage of returns becomes smaller.
●
Managers may consider capturing the needs for younger customers through
advertising design (landing page).
Discussion -- Limitation
●
optimal threshold for threshold free shipping strategy
●
the effect of return policy
●
the types of promotions (price reduction, coupons, cash mail-in rebates, free gift
cards, and buy-one-get-one discount)
●
Different shipping strategies were implemented separately within one year, it
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