Empirical decomposition of customer responses to discount coupons in online FMCG retailing

Samaneh Montazeri, Ali Tamaddoni, Stanislav Stakhovych and Michael Ewing

Journal of Retailing and Consumer Services, 2021, vol. 58, issue C

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.

Keywords: Discount coupons; Bayesian estimation; Customer heterogeneity; Price-based promotions (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:58:y:2021:i:c:s0969698920313485

DOI: 10.1016/j.jretconser.2020.102340

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