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The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?

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  • van Lin, Arjen
  • Gijsbrechts, Els

Abstract

This paper studies promotion-induced competition between supermarkets and drugstores, resulting from increased channel blurring and category overlap. It documents the relative impact of price cuts and feature ads at the two channels, and establishes substantive factors underlying their differences in promotion effectiveness. Estimates from a household-level model of category purchase incidence, store choice, and quantity, in five large health and beauty-care categories, show that the promotion effects are much larger for supermarket than drugstore chains. Though this partly follows from asymmetries in the channels' drawing power and from differences in in-store response, a key driver is the accessibility of promotional price information: because they are visited more frequently than drugstores and their store flyers are read more often, supermarkets gain relatively more from price cuts and feature ads than drug chains. Managerial implications are discussed.

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  • van Lin, Arjen & Gijsbrechts, Els, 2016. "The battle for health and beauty: What drives supermarket and drugstore category-promotion lifts?," International Journal of Research in Marketing, Elsevier, vol. 33(3), pages 557-577.
  • Handle: RePEc:eee:ijrema:v:33:y:2016:i:3:p:557-577
    DOI: 10.1016/j.ijresmar.2015.09.002
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    Cited by:

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    2. Grandi, Benedetta & Cardinali, Maria Grazia, 2022. "Colours and price offers: How different price communications can affect sales and customers’ perceptions," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    3. Ieva, Marco & Ziliani, Cristina & Gázquez-Abad, Juan Carlos & D'Attoma, Ida, 2022. "I read, therefore I buy? Analyzing the impact of flyer distribution and readership on purchase behaviour," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    4. Woo, Hongjoo & Chung, Angie & Richey, Robert Glenn & Hopkins, Christopher & Lee, Kangbok, 2022. "Product-flyer location and type of product categories in retailing," Journal of Business Research, Elsevier, vol. 138(C), pages 146-160.
    5. van Ewijk, Bernadette J. & Gijsbrechts, Els & Steenkamp, Jan-Benedict E.M., 2022. "What drives brands’ price response metrics? An empirical examination of the Chinese packaged goods industry," International Journal of Research in Marketing, Elsevier, vol. 39(1), pages 288-312.
    6. Bonfrer, André & Chintagunta, Pradeep & Dhar, Sanjay, 2022. "Retail store formats, competition and shopper behavior: A Systematic review," Journal of Retailing, Elsevier, vol. 98(1), pages 71-91.
    7. Prediger, Maciel & Huertas-Garcia, Rubén & Gázquez-Abad, Juan Carlos, 2019. "Store flyer design and the intentions to visit the store and buy: The moderating role of perceived variety and perceived store image," Journal of Retailing and Consumer Services, Elsevier, vol. 51(C), pages 202-211.
    8. Boto-García, David & Alvarez, Antonio, 2020. "Modelling the effect of store flyers on supermarket sales: An application to olive oil demand," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    9. Widdecke, Kai & Keller, Wiebke & Gedenk, Karen & Deleersnyder, Barbara, 2023. "Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters," Other publications TiSEM 15e8cbcc-02a9-4441-ad2b-2, Tilburg University, School of Economics and Management.

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