B-School Bulletin: The High Cost Of Free Shipping

News from Dartmouth College Tuck School of Business

“It’s unclear when, exactly, the trend of free shipping began, but a good starting point is probably the 1999 launch of Zappos, an early online shoe seller.

“The company worried that consumers wouldn’t be willing to buy shoes without trying them on, so it offered free shipping and free returns, thus eliminating the risk the shoes didn’t fit. These days, free shipping is among the most popular promotions online retailers deploy, and consumers have come to expect them whenever they shop online. At the same time, the rate of product returns has grown immensely. A study in 2006 found that 5.6 percent of online purchases were returned. By 2013, that number had increased to almost 37 percent.

“Scott Neslin, the Albert Wesley Frey Professor of Marketing at Tuck, has been studying sales promotions for decades. In a new working paper, Free Shipping Promotions and Product Returns, he and Edlira Shehu of the University of Southern Denmark and Dominik Papies of Universität Tübingen in Germany investigate how these phenomena work in combination.”

Competing In An Increasingly Digital Age

News from London Business School

“When Hein Knaapen, Chief Human Resources Officer at ING, took part in a panel discussion at London Business School’s HR Strategy Forum in February, he said something striking while discussing how established businesses can best compete in an increasingly digital age. ING’s biggest competitor, Knaapen said, is not a bank at all: these are Amazon and other big techs, platforms that are now often behemoths selling an ever-expanding range of consumer goods.

“To understand the context of Knaapen’s remark, we need to know something of ING’s recent history. The Dutch banking giant was founded in 1991 as a merger of an insurance firm, Nationale-Nederlanden and a bank, NMB Postbank Group. It quickly grew into a firm with a global reach, employing 51,000 staff and offering retail and wholesale banking to customers in more than 40 countries.”

Health Care Is An Investment, And The U.S. Should Start Treating It Like One

News from Harvard Business School

“We invest billions of dollars each year in medicines, new technologies, doctors, and hospitals — all with the goal of improving health, arguably our most prized commodity. Yet, investments in the U.S. health care system woefully underperform relative to those made in health care in other countries. For instance, the U.S. spends nearly 7–10% more of its national income on health care than other similar countries and yet life expectancy at birth remains, on average, two to three years lower.

“To be sure, many factors influence health outcomes and the investments the health care system makes are only one input. But a large reason why investments in health care underperform is because we invest so much in services that are clearly low-value — i.e., offer little or no clinical benefit relative to the cost — and likely many more where the returns are gray. Investing limited health care dollars into low-value services crowds out our ability to spend on high-value services. So if we want to see better outcomes, we need to start to think like investors.”

Tuck First-Year Students Begin 10-Week Real World Project Course

News from Dartmouth Tuck

In March, a team of Tuck students ventured to Morocco for a global First-Year Project

“Tuck first-year students returned to campus from spring break recently and began an exciting phase of their MBA experience: First-Year Projects.

“Fifty-nine teams composed of 292 students are working for companies such as Smugglers’ Notch Resort, PF Flyers, Orvis, and the Himalayan Cataract Project, applying their classroom learning to complex business challenges.

“The FYPs began with the annual kickoff event on March 26, where teams learned how to scope their project and then met with their client on campus or via video conferencing. In the afternoon, teams met with their faculty advisors, who ensure that each team works on key project management skills such as defining the key question, developing an issue tree, and story boarding. The event concluded with a social gathering where teams, advisors, and clients mingled and discussed the work ahead.”

Emory University Undergraduate Applications Reach New Record High

News from Emory University Goizueta Business School

Emory student volunteers welcome the newest class on Move-In Day, helping them settle in to their new campus home

“Emory University has received a record 27,982 applications to be part of the Class of 2022, a 16 percent jump from the previous year.

“Beyond the growth in the number of students vying for spots in undergraduate programs, admission officers saw students with higher academic achievements and who also embody Emory’s commitment to discovery, engagement and leadership both in the classroom and in the community.

“’We are moving beyond focusing on students who have the ability to do something wonderful to those who will,’ says John Latting, associate vice provost for enrollment and dean of admission. ‘Emory is attractive not just for its liberal arts and research excellence but for students who are thinking of how to have a positive influence on the world.’”

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