Who is willing-to-pay for sustainable last mile innovations?

ABSTRACT

The COVID-19 pandemic is accelerating the growth of e-commerce. As a result, urban freight transport volume is increasing, leading to traffic congestion and negative environmental impacts, while service quality is deteriorating. These challenges can be addressed through radical innovation of urban last mile logistics with environmental-friendly transportation modes (e. g., cargo bikes), consolidation points (e. g., micro hubs) and new digital service models (e. g., time window alignments). However, sustainability improvements lead to higher costs and will not be realized - beyond pilot studies - until they become economically viable. Therefore, willingness-to-pay (WTP) for sustainable last mile innovations (LMI) is one of the most important success factors. In our work, we aim to investigate the WTP for the additional costs of sustainable LMI. While various stakeholders such as online retailers, logistics service providers or city administrations could benefit from sustainable LMI, in our study we focus on the group that is likely to benefit the most urban inhabitants. Therefore, we investigated consumers' WTP for sustainable LMI by conducting a questionnaire survey in Germany in September and October 2020 (n = 1,071) and analyzing the data using multivariate statistics. The results show four consumer segments, their characteristics, and their WTP for LMI. Based on the results, implications for stakeholders (especially online retailers) are derived to address the behavior of each consumer segment towards more sustainability in urban last mile logistics. Further research would be interesting to evaluate allocation scenarios for the additional costs among all last mile stakeholders empirically. © 2023 The Authors. Published by ELSEVIER B.V.