The effect of price promotions on consumer shopping behavior across online and offline channels: differences between frequent and non-frequent shoppers

Abstract

This study evaluates the differential effect of price promotions on brand choice across the offline and online channels of a grocery retailer. We use scanner data to analyze the purchasing behavior of orange juice of a sample of multichannel customers of a large European grocery chain selling across offline and online stores. We find that promotions have a higher impact on offline than in online purchases. In fact we don't find a significant effect of promotions in the online channel. We also find a moderating effect of purchase frequency in the category, in the sense that frequent customers are more influenced by promotions than infrequent customers. While this effect is clear in the offline channel, it is not found in the online channel. There is also a high degree of heterogeneity in the effect of promotions among consumers, specially in the offline channel. It is important to remark that these differential effects across channels have been found for the same sample of multichannel customers, meaning that the same consumers are more affected by promotions offline than online. Potential causes and consequences of these results, as well as implications for management, are also discussed.