- 15 May 2007
- Working Paper Summaries
I’ll Have the Ice Cream Soon and the Vegetables Later: Decreasing Impatience over Time in Online Grocery Orders
Executive Summary — How do people’s preferences differ when they make choices for the near term versus the more distant future? Providing evidence from a field study of an online grocer, this research shows that people act as if they will be increasingly virtuous the further into the future they project. Researchers examined how the length of delay between when an online grocery order is completed and when it is delivered affects what consumers order. They find that consumers purchase more "should" (healthy) groceries such as vegetables and less "want" (unhealthy) groceries such as ice cream the greater the delay between order completion and order delivery. The results have implications for public policy, supply chain managers, and models of time discounting. Key concepts include:
- Consumers spend less and order a higher percentage of "should" items and a lower percentage of "want" items the further in advance of delivery they place a grocery order.
- Encouraging people to order their groceries up to 5 days in advance of consumption could influence the healthfulness of the foods that people consume.
- Similarly, asking students in schools to select their lunches up to a week in advance could considerably increase the healthfulness of the foods they elect to eat.
- Online and catalog retailers that offer a range of goods as well as different delivery options might be able to improve their demand forecasting by understanding these findings.
How do decisions for the near future differ from decisions for the more distant future? Most economic models predict that they do not systematically differ. With online grocery data, we show that people are decreasingly impatient the further in the future their choices will take effect. In general, as the delay between order completion and delivery increases, customers spend less, order a higher percentage of "should" items (e.g., vegetables), and order a lower percentage of "want" items (e.g., ice cream). However, orders placed for delivery tomorrow versus two days in the future do not show this want/should pattern. A second study suggests that this arises because orders placed for delivery tomorrow include more items for planned meals (as opposed to items for general stocking) than orders placed for delivery in the more distant future, and that groceries for planned meals entail more should items than groceries for general stocking.