Customer’s perceptions in Last-mile delivery service

Abstract: Purpose – Increasingly, last mile logistics is driven by customer-oriented strategies that requires better understanding of customers’ perceptions. This thesis views last-mile delivery as a service and aims to examine the relation of logistics service quality and other constructs used in service management literature to measure customers’ perception. Built on the operational definition of perceived value as trade-off between benefits and sacrifices, the effects of logistics service quality factors as components of perceived value are modeled and investigated together with customer satisfaction and loyalty acting as outcomes. Design/methodology/approach – An online survey is conducted resulting in 210 valid responses collected from two different Internet platforms. Data are analyzed using Partial least squares - Structural equation modeling technique. Findings – Logistics service quality is consistently proved to be main driver for perceived value, in which timeliness has strongest effect. Sacrifices indicated by monetary and non-monetary indicators are found to have nonsignificant effect on perceived value for last-mile delivery service context. Furthermore, customer satisfaction is a complementary partial mediator in the relationship between perceived value and loyalty. Practical implication – Different strength of logistics service quality factors could be quantified providing logistics managers insights of which aspect customer value the most in their service. Not only are service attributes needed to be improved but also customer satisfaction should be taken into consideration if they want to maintain behavioral loyalty. Originality/Value – This thesis unfolds perceived value of last-mile delivery service by modeling perceived value as a formative second-order construct that is conceptualized using logistics service quality factors and sacrifices so that it complies theoretical justification and enables assessment of relationship in a nomological network.