Segmentation of Electronic Commerce Delivery Service Based on a Stated Preference Survey

Abstract

This paper presents a case study examining delivery service preference of electroniccommerce products. With the increasing of electronic commerce and home shoppingmarket, parcel delivery service market has been growing annually by more than 10% inKorea. However, the quality of delivery service and profitability are gradually decreaseddue to the price competition. A survey conducted by Korea Chamber of Commerce andIndustry revealed that nearly half of the respondents selected delivery accuracy and time asmajor factors in delivery service, implying that online consumers consider service factorssuch as delivery time more important rather than delivery cost. In this research, a statedpreference survey with 16 scenarios was conducted for online consumers to examinedelivery preference depending on the type and value of products that they purchased online. The analysis results show that online consumers have a willingness to pay extra cost forrapid delivery or want lower price although it is much slow. It implies that currentuniformed delivery cost of online products can be differentiated with different prices fordifferent consumers and products. In addition, the study shows that different onlineproducts have different value of time, 27 won per hour on average.