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Green labels can steer shoppers toward more sustainable delivery options

Steering customer behaviour with labels can help to reduce vehicles’ miles and associated emissions of home delivery services by as much as 12%, according to new research from Rotterdam School of Management, Erasmus University (RSM). Covid-19 and the associated lockdowns have substantially increased the demand for home delivery services. Supplying people with basic needs such as food requires efficient and effective logistics operations behind home delivery, to create environmental and financial gains.

New research by Dr Niels Agatz and Professor Daan Stam looks at green labelling certain time slots and delivery options that have less environmental impact to see if consumers can be influenced to choose these. ‘Companies already use green labels in practice. But until now there was no scientific research that systematically studied the effect of these labels in the context of service logistics. We decided to study the effectiveness of incentives on delivery service time slot choices. In particular, we focused on the use of green labels that specify time slots as environmentally friendly and that intrinsically motivate customers to choose a specific delivery time slot in lieu of price incentives based on extrinsic motivation. This is important because green labels’ intrinsic nature affects costumer choice in fundamentally different ways than price incentives, ie discounts on delivery fees,’ said Dr Niels Agatz. The researchers conducted two experiments and two simulation studies to study the effects of using green labels, finding that companies should seriously consider using labelling to improve their impact on the environment. The paper has been published in Production and Operations Management under the title ‘The impact of green labels on time slot choice and operational sustainability’.