From Macro to Micro: The Dynamic Impacts of Discounts Depth and Discounts Breadth on Customer Deal Proneness
(A2020-64481)

AUTHORS

Tanetpong Choungprayoon, Stockholm School of Economics

KEYWORDS

Promotional Discounts; Deal Proneness; Multichannel Grocery Shopping

ABSTRACT

The effects of discounts’ features on retailer’s performance metrics are substantially studied by academic researchers. However, there is relatively little research on impacts from the store and category discounts’ depth and breadth on customers’ dynamic behavior related to deal, which is a deal proneness. Using detailed scanner data from the membership database of a multichannel grocery retailer, the researcher can examine individual purchasing behavior and his exposure to the different discount characteristics from different store settings at a different visiting time. Autoregressive distributed lag model is employed to estimate the average dynamic impacts from these variables. This study found that: (1) The variety of discounts makes consumers more deal-prone than the depth of discounts (2) Customer’s previous behavior play less important role compared to macro discounts’ environments and (3) An online channel can moderate these impacts by making store depth and category breadth more significant to a customer’s deal proneness than other variables.