Live shopping promotions: which categories should a retailer discount to shoppers already in the store?

Julia Wamsler (), Denis Vuckovac (), Martin Natter () and Alexander Ilic ()
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Julia Wamsler: University of Zurich
Denis Vuckovac: ETH Zurich
Martin Natter: University of Zurich
Alexander Ilic: ETH Zurich

OR Spectrum: Quantitative Approaches in Management, 2024, vol. 46, issue 1, No 5, 135-174

Abstract: Abstract Digitalization allows retailers to target customers with personalized promotions when they enter the store. Although traditional promotional retailer objectives, such as store visit, become obsolete once the shopper is already in the store, retailers still tend to target customers based on indicators that drive store visit, such as recency, frequency, and monetary value (RFM). In order to improve promotional efficiency, the authors propose targeting shoppers based on information derived from regularity patterns in individual interpurchase times at the point of sale. When compared to RFM-based targeting, the proposed live targeting approach translates into higher redemption rates (+ 10.5 percentage points), revenues (+ 42.3 percentage points), and purchase frequencies (+ 44.2 percentage points). The findings emphasize the importance of promotional timing and of considering customers’ outside potential for dynamic in-store targeting.

Keywords: Personalized price promotions; Interpurchase times; Share-of-transactions; Targeting metrics; Dynamic targeting (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00291-022-00685-w

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