Push and pull: Modeling mobile app promotions and consumer responses

How effective are push promotions through mobile apps for brick-and-mortar retailers and what strategies can improve the performance of targeted push marketing? To address these questions, we develop a multivariate event history model to evaluate the effects of behavior and location-based push promotions on shoppers’ app usage and offline shopping activities. Our study generates new insights into mobile app promotions and offline shopping. We find that behavior-based pushes have a higher impact on consumer responses before a shopping trip than during a trip, and their effects vary significantly across different types of retailers. The effects of pushes are positively correlated with shoppers’ propensities of app pulls and mall visits, which suggests that timing the delivery of pushes can make them more effective. Furthermore, location-based pushes exhibit stronger positive effects on app pulls and coupon outclicks during a shopping trip than behavior-based pushes, even after shoppers receive the latter before the trip, which shows that behavior and location-based pushes are not substitutable. We demonstrate through simulations that our model enables marketers to design more effective mobile targeting strategies by exploiting heterogeneous consumer responses. Addressing potential endogeneity by controlling for the information used for customer selection in the customer’s response functions, our proposed model can be applied to many empirical problems involving event history data.