Document Type

Article

Abstract

E-retailing, though growing rapidly, is still a very small proportion of total retail sales. One issue inhibiting sales over the internet is delivery. Many customers are not happy paying what they often perceive to be excessive delivery charges. However, the average customer on the internet is not highly price oriented, so resistance to paying delivery charges may occur because customers do not believe that they are receiving any value for this additional cost. Our research looks at the impact on willingness to pay delivery charges of different price levels and a message informing the customer that the delivery time specified is considered good service by industry standards. This simple message seems to focus customer thinking on value received (better quality service), and lowers resistance to paying delivery charges. Thus, explicit reference to the quality of the delivery service, where companies actually have good delivery, seems to be a useful message to include when customers are considering information about delivery charges.

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