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

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  • Montazeri, Samaneh
  • Tamaddoni, Ali
  • Stakhovych, Stanislav
  • Ewing, Michael

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.

Suggested Citation

  • Montazeri, Samaneh & Tamaddoni, Ali & Stakhovych, Stanislav & Ewing, Michael, 2021. "Empirical decomposition of customer responses to discount coupons in online FMCG retailing," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    • Handle: RePEc:eee:joreco:v:58:y:2021:i:c:s0969698920313485
    DOI: 10.1016/j.jretconser.2020.102340
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    1. Bhatt, Siddharth & Pai, Dinesh R. & DelVecchio, Devon, 2023. "The dark side of multiunit discounts: Multiunit discounts reduce rest of basket revenue," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    2. Zhang, Hongchao & Yu, Yu & Qin, Yinggao, 2023. "The effects of constrained mobile coupons in the mobile channel," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    3. Sadiq, Mohd & Bharti, Kumkum & Adil, Mohd & Singh, Ramendra, 2021. "Why do consumers buy green apparel? The role of dispositional traits, environmental orientation, environmental knowledge, and monetary incentive," Journal of Retailing and Consumer Services, Elsevier, vol. 62(C).
    4. Duan, Yongrui & Liu, Tonghui & Mao, Zhixin, 2022. "How online reviews and coupons affect sales and pricing: An empirical study based on e-commerce platform," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    5. Griva, Anastasia, 2022. "“I can get no e-satisfaction†. What analytics say? Evidence using satisfaction data from e-commerce," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    6. Arindra Nath Mishra & Shayani Sengupta, 2024. "Discount Coupons Versus Trust and Satisfaction—Which is Better for M-Commerce?," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 49(1), pages 28-42, February.
    7. Tsai, Pei-Hsuan & Chen, Chih-Jou & Hsiao, Wei-Hung & Lin, Chin-Tsai, 2023. "Factors influencing the consumers’ behavioural intention to use online food delivery service: Empirical evidence from Taiwan," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).

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