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Better or Worse? Effects of online promotion habits on customer value: An empirical study

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  • Wang, Qian
  • Chen, Hang

Abstract

Online frequent and uninterrupted price discounts easily cause customers to form general tendencies to purchase promotions, or ‘online promotion habits’. Compared with offline promotion shopping, the distinct features of online promotion shopping make customer behaviours highly changeable and leave the effects of online promotion habits on customer value a puzzle. Using a dataset of real transactions from a leading online apparel retailer in China, this study makes continuous observations of customers’ online promotion habits. Drawing on the behavioural learning theory, we empirically investigate the dynamic effects of online promotion habits on customer value. The results reveal that after customers form online promotion habits, their customer value increases significantly. Furthermore, among customers with online promotion habits, online promotion habits exert an inverted U-shaped effect on customer value. Namely, as online promotion habits strengthen, customer value increases accordingly, yet negative outcomes show if online promotion habits exceed a certain level. We discuss the theoretical and managerial implications of our findings, which will enable researchers and practitioners to measure and dynamically manage customers’ online promotion habits.

Suggested Citation

  • Wang, Qian & Chen, Hang, 2022. "Better or Worse? Effects of online promotion habits on customer value: An empirical study," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:joreco:v:68:y:2022:i:c:s0969698922001114
    DOI: 10.1016/j.jretconser.2022.103018
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