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Consumer sensitivity to delivery lead time: a furniture retail case

Gaetano Marino (Department of Management and Production Engineering, Politecnico di Torino, Turin, Italy)
Giulio Zotteri (Interuniversity Department of Regional and Urban Studies and Planning, Politecnico di Torino, Turin, Italy)
Francesca Montagna (Department of Management and Production Engineering, Politecnico di Torino, Turin, Italy)

International Journal of Physical Distribution & Logistics Management

ISSN: 0960-0035

Article publication date: 10 May 2018

Issue publication date: 21 May 2018

2727

Abstract

Purpose

Short delivery time is a feature that can influence consumers’ purchasing decisions and that retailers compete over fiercely. Accordingly, evaluating the effect of delivery time on demand and identifying marketing-mix variables that alter this relationship may influence retailers’ strategies and impact supply chain (SC) performance. The paper aims to discuss these issues.

Design/methodology/approach

This study was performed in collaboration with the largest furniture retailer in Italy, which provided its sales and inventory data for 19,000 units sold over a six-month period in 32 stores throughout Italy. Data were analysed using logistic regression with fixed effects.

Findings

The value of delivery time for consumers, even in an industry generally characterised by long delivery lead times, is surprisingly high. The evidence reveals that when the delivery time changes from two days to seven days, demand is reduced by 37.5 per cent, although variables related to location and the marketing mix moderate this relationship.

Practical implications

Retailers can use the findings presented herein to drive their inventory and facility planning decisions and support investments in SC integration.

Originality/value

Supply chain management (SCM) studies consider the value of delivery time anecdotally and have neglected empirical estimations of the magnitude of the effects of delivery time on consumer demand. Further, SCM studies have not explored the factors moderating this relationship, although intertemporal choice and service management studies have demonstrated the existence of such factors.

Keywords

Citation

Marino, G., Zotteri, G. and Montagna, F. (2018), "Consumer sensitivity to delivery lead time: a furniture retail case", International Journal of Physical Distribution & Logistics Management, Vol. 48 No. 6, pp. 610-629. https://doi.org/10.1108/IJPDLM-01-2017-0030

Publisher

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Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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