Business Case Studies & Business Publications

The Conundrum of Contingent Free Shippin...

Baucells, Manel, L...

Case

The Conundrum of Contingent Free Shipping

Baucells, Manel; Lert, Devin

QA-0939 | Published February 28, 2022 | 2 pages Case

Collection: Darden School of Business

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This case uses the intent to make an online purchase of a clothing item to explore the role intuition may play in shopping decisions. Two criteria, price and quality, are identified as being important, and the protagonist is presented with another attribute: shipping cost. Because consumers may not expect to pay for shipping, they may be willing to buy an item that otherwise would not be attractive when doing so is rewarded with free shipping.

-Reinforce concepts of mental accounting, that is, that consumers compare prices to reference prices. -Compute the perceived value of the different purchasing alternatives in the presence of reference price comparison and loss aversion. -Examine a particular instance where the aversion to pay for an unwelcome shipping cost can nudge consumers toward buying an extra item they would have not purchased otherwise. -Discuss the ethical aspects of using these types of nudges in marketing strategies.