Nudging the Last Mile: Combining Behavioral Insights and Monetary Incentives for Sustainable Delivery Choices

Last mile delivery, the final leg of the supply chain to consumers, significantly impacts the en- vironment. The role of consumers’ behavior in this process, has been relatively overlooked and their willingness to find a trade-off between the benefits of home delivery and the impact on the environment has been neglected; behavioral logistics aims to optimize supply chain operations by understanding and influencing human behavior, enhancing efficiency and sustainability. Consumer behavior within the grocery sector is influenced by a myriad of factors and the rise of environ- mental awareness among consumers provides an opportunity to impact their preferences, steering them towards more sustainable last mile delivery options. The importance of home deliveries in the grocery sector has surged, especially post-pandemic; grocery stores adapt to this trend, focusing on efficient last mile delivery to meet changing consumer demands. By utilizing the experimental economics methodology tailored to the grocery sector, this research systematically examines the impact of financial incentives and nudges on last mile delivery choices. The controlled environment offers valuable insights into consumer responses to various incentive structures, helping to shape strategies that maximize both environmental benefits and economic sustainability. The findings underscore the interplay between environmental sustainability, consumer behavior, financial incen- tives, and nudges in the last mile delivery of groceries providing valuable insights for businesses, policymakers, and consumers in their collective endeavor to build a more sustainable and efficient last mile delivery system.