Immediate and Continued Effects of App Real-Time Targeting along Customer Shopping Journey: A Field Experiment

Abstract

Timing and shopping stages are two critical factors when designing personalized mobile targeting. However, there is scant evidence demonstrating the business impact of app real-time targeting on customers’ subsequent shopping behaviors across different shopping stages. By conducting a novel field experiment that randomizes the treatment in two shopping stages with a large Japanese retailer, this study investigates the immediate and continued effects of app real-time targeting on customers' in-store shopping and app usage behaviors. Grounded in the elaboration likelihood model, we develop a conceptual framework to explain customers' heterogeneous responses to app real-time targeting in early and late shopping stages. Our empirical results suggest that the customer shopping stage has a significant influence on the effectiveness of real-time targeting. Specifically, real-time targeting of customers in the late shopping stage has a positive impact on their current and future purchase decisions. However, real-time targeting in the early shopping stage only positively drives customers’ future purchase decisions but has no effect on facilitating customers' current shopping decisions. We also find that customers’ prior experience plays a dual moderating role in these identified effects in different shopping stages: while attenuating the targeting effect in the late stage of shopping journey, it amplifies the effect of real-time app targeting on customers’ continued purchase decisions in the early shopping stage. Our paper contributes to the literature on mobile targeting and omnichannel shopping and has significant managerial implications for cross-channel mobile targeting.