Empirical decomposition of customer responses to discount coupons in online FMCG retailing. (January 2021)

• Record Type: Journal Article
• Authors: Montazeri, Samaneh; Tamaddoni, Ali; Stakhovych, Stanislav; Ewing, Michael
• Is Part Of: Journal of retailing and consumer services. Volume 58(2021)
• Publication Date: 2021-01
• Subjects: Discount coupons -- Bayesian estimation -- Customer heterogeneity -- Price-based promotions; Retail trade -- Periodicals; Service industries -- Periodicals; Customer services -- Periodicals; Commerce de détail -- Périodiques; Service à la clientèle -- Périodiques; Customer services; Retail trade; Periodicals; 658.87
• DOI: 10.1016/j.jretconser.2020.102340
• Languages: English
• ISSNs: 0969-6989

Abstract

Abstract: This study considers the efficacy of 'general' discount coupons: i.e. those whose discounts apply storewide. We decompose purchase behavior into three effects: spending, basket size, and inter-purchase time. The effects of dollar-off vs. percentage-off coupons are examined for 3, 827 customers who had redeemed both types of coupon framings in an Australian online fast-moving consumer goods (FMCG) retail context. Results from Bayesian simultaneous equation modelling confirm that compared to dollar-off coupons, percentage-off general coupons induce customers to both spend more and shop more items. Moreover, by capturing consumer heterogeneity the customer base can be segmented into several clusters based on their reaction to coupons.