Last Mile Non-Delivery: Consumer Investment in Last Mile Infrastructure

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Consumers execute routine last mile logistics in most brick-and-mortar supply chains. The online version of last mile logistics varies greatly, but still suffers from substantial challenges–one of these being theft, specifically porch piracy. In fact, each day more than 1.7 Million packages are stolen or go missing each day in the United States. In this paper, we look at a consumer’s decision, to buy or not to buy a drop box for online package delivery. We view this decision as an act of co-creation, something routine in both online and traditional retailing, the consumer co-creation of the supply chain. The purpose of this research is to examine the feasibility of using drop boxes, an alternative delivery system, to reduce retailer’s financial and reputation costs and increase consumer confidence in direct ordering. We determine that such alternative infrastructures signal a potential increase in revenues for online retailers. We also show that consumers are willing to pay for such drop boxes even as they co-create a variety of supply chains.