Consumer Transportation Costs and the Value of E-Commerce: Evidence from the Dutch Apparel Industry.

This article investigates the sources and magnitude of consumer welfare gains from e-commerce in the Dutch retail apparel industry, emphasizing the role of transportation cost savings. Using a novel, highly granular panel data set with precise consumer and store locations, the authors estimate a multiple discrete choice model capturing consumers’ retailer, channel (online/offline), and purchase quantity decisions. They find that in 2018, the average consumer’s welfare gain from e-commerce was approximately €470, with about 45% (€209) of this gain attributable to avoided transportation costs, while 54% (€255) stemmed from increased variety through new online retailers and channels, and 1% (€6) from intensified price competition. The study highlights that ignoring transportation cost savings substantially understates the welfare impact of e-commerce and demonstrates significant heterogeneity in gains across demographic and geographic groups.