Future Purchase Research Articles

Analysis of Purchase History Data Based on a New Latent Class Model for RFM Analysis

Recently, it has become easier to make use of various kinds of information on customers (e.g. customers’ purchase history), due to the development of information technology. Especially in the marketing field, in fact, many companies try to employ customer segmentation for the services customization which leads to increase customer loyalty and to keep high customer retention. One of the well-known approaches for the customer analysis based on purchase history data is the RFM analysis. The RFM analysis is usually used to segment customers into several groups by using three variables; how long it has been since their last purchase, how many times they purchased, and how much they spent. However, the conventional method of the RFM analysis did not assume a generative model. Therefore, when applying to an actual data set and scoring each index of R, F, M scores, several problems occur. The main problem is that an analyst should arbitrarily decide the threshold for the scores of RFM. On the other hand, in the field of machine learning, the probabilistic latent semantic analysis is widely used for soft clustering. The latent class model enables us to cluster customers into latent classes and to calculate the assignment probabilities of each customer to each latent class. In this paper, we propose a new latent class model for the RFM analysis based on the purchase history data. The proposed model enables to decide the scoring of RFM and segment customers automatically, and the soft clustering approach helps the interpretation of the result. Furthermore, the proposed model takes account of the generation model of RFM scores. From the result of actual data analysis, it became clear that it is possible to extract latent classes that express the statistical characteristics of data well. Given a generative model estimated from the given data, it is also possible to predict future purchase behaviors of customers or to generate virtual data for simulation analysis and make decisions based on the result. We verify the effectiveness of our model by analyzing a real purchase history data of a Japanese major retail company.

Are negative and positive reviews regarding apparel fit influential?

PurposeThe purpose of the current study is to explore how valenced fit reviews affect the consumer decision-making process during online apparel shopping.Design/methodology/approachA single factor (valence of fit review) within-subject experimental design was employed to examine how the valenced fit review (negative vs positive) affects the consumer online purchase decision process. A mock website was created to simulate the online shopping environment through four steps for developing a stimulus website for the main study. The data were analyzed using repeated multivariate analysis of variance and structural equation modeling.FindingsA total of 418 female consumers completed an online self-administrated survey. Results showed that positive fit review was more compelling than negative fit review for female consumers when they like the apparel product. Two aspects of information credibility (review and site credibility) and confidence in purchase decision evoked by both fit reviews and overall product information were significant determinants of the consumer purchase decision process in increasing consumers’ future purchase intentions through attitude to the online retailer.Originality/valueThe current study was an attempt to fill the gap in knowledge regarding the crucial role of fit reviews in apparel product purchase decisions in an online context. This study confirmed the type of fit reviews that would be influential on female consumers’ online purchase decision-making process for apparel products when they liked the apparel product, supporting positive confirmation bias from the information processing point of view. This study contributed to the importance of the two concepts (i.e. credibility and confidence in the purchase decision) in online information processing and purchase decision-making process.

Examining Sponsorship’s Effectiveness Over the Internet: A Conceptual Framework for Researchers and Practitioners

The aim of this research is to examine sport sponsorship’s effectiveness over the internet. A conceptual framework for sponsorship evaluation over the internet was proposed, incorporating crucial factors such as supporters’ beliefs about sponsorship, their satisfaction form the sport event as well as their degree of sport involvement, the usage of website and social media, awareness of and attitude toward real sponsoring firms and their actual and future purchase intentions concerning sponsors’ goods and services. A quantitative method was used for the purpose of the current research and a total of 3434 questionnaires were successfully completed and analyzed. The empirical results indicated that sponsorship awareness impacts positively and significantly in both actual and intended purchase behavior of the respondents, suggesting that sponsorship awareness is the initial stage of a continuum of fans’ responses that can lead to their purchase intentions and actual purchase. Evidence on this study contributes to the ongoing debate about sponsorship effectiveness and its implication on customer behavior and provides significant implications for managers wishing to improve their future revenues by investing in sponsorship deals, since sponsorship awareness is an important feature that managers must control in order to affect their customers purchasing decisions.

Partial Least Squares Structural Equation Modeling in Online Shopping: the Moderator Effect Between Impulsive Buying Tendency and Behavior

Single’s Daywas first promoted by Alibaba's shopping website on November 11, 2009. Ten years later, Taobao successfully developed this day into a global carnival shopping festival. This research focuses on undergraduate business school students through online questionnaires across the Taiwan Strait. This study is based on five impact factors, including impulse buying tendencies, herd behavior, website features, promotional techniques and impulse buying behavior. No evidence showed that gender, age and monthly disposable income affect students’ buying behavior. This study also found that herd behavior, website features and promotional techniques are moderator effects between impulse buying tendency and impulse buying behavior. We also proved that website design and the opinions of their peers affect consumers' decision aking. According to the analysis, in the current online shopping environment, operators should pay more attention to herd behavior, website features and promotional techniques. This study suggests that the industry should provide sufficient information to reduce emotional conflict, and use these important factors to attract consumers' future purchases.

Consumer acceptance of edible insect foods: an application of the extended theory of planned behavior

BACKGROUND/OBJECTIVESThe purpose of this study was to measure consumer acceptance of edible insect foods (EIFs) while applying the extended theory of planned behavior (ETPB). Insects as food have attracted interest as potential possible sources of nutrition for the future. This study investigated consumers' perception toward insect food and future purchase behaviors.SUBJECTS/METHODSA survey was conducted among citizens of Korea. About two thirds of respondents had tried an EIF previously, and the mean value for food neophobia was 3.1 on a 5-point Likert scale. Respondents were divided into 2 groups of those experienced with EIFs and those not and by level of food neophobia. An independent t-test, multiple regression and descriptive analyses were conducted on the data.RESULTSThe primary reason for not eating EIFs was that their insect form induced disgust. Comparisons of ETPB attributes by experience with EIFs showed significant differences between groups for food neophobia, subjective norm, attitude, and behavioral intention. In addition, significant differences were found for subjective norm, perceived behavioral control, attitude, and behavioral intention between 2 neophobia groups. Finally, the results of measuring the relationships between ETPB attributes and behavioral intention showed only subjective norm and attitude affected behavioral intention.CONCLUSIONSThese results suggest that enhanced subjective norms producing a publicly accepted EIFs environment would help encourage the purchase of EIFs. The results of this study can help the development of EIF products for future food markets.

The role of continuous trust in usage of online product recommendations

PurposeThis study examines the role of continuous trust (i.e., a trust that develops over time as a result of continuous usage interactions) in determining customers' intention to continue using online product recommendations (OPRs).Design/methodology/approachBased on information system (IS), continuance model, and continuous trust, we propose that continuous trust will influence customers’ intention to continue OPRs’ use directly and indirectly via their satisfaction and usefulness of the OPRs. The research model is tested using data collected via an online survey from 626 existing users of OPRs in 15 different countries.FindingsThe empirical results revealed that continuous trust is shown to be a significant predictor of customers’ intention to continue OPRs use for future purchases. Additionally, the customers’ perceived confirmation and continuous trust positively influence their perceived usefulness and satisfaction with the OPRs, which subsequently influence customers’ OPRs continuous usage intention.Research limitations/implicationsThe saliency of continuous trust and usefulness of OPRs present e-retailers with potential fruitful areas to shape future usage of OPRs. In addition, e-retailers must understand that improving the OPR usefulness on its own may not lead to OPRs continuous usage until OPRs trustworthiness is not continually improved. OPRs itself may be convenient and useful, but trustworthy OPRs will pay stronger dividends for customer satisfaction and OPRs’ continuous usage.Originality/valueThe incorporation of continuous trust into the IS continuance model offers a new theoretical lens and an alternative explanation for the OPR continuous usage intention. This study stands in contrast to the large majority of research concerning initial trust and OPRs adoption, in that it focuses on continuous trust (as opposed to initial trust) and on a customers’ OPRs continuous usage intention as opposed to the initial adoption decision.

Investigating the Role of Multiple Channels in Predicting Website Browsing Patterns and Purchase

In today’s online environment, consumers and sellers interact through multiple channels such as email, search engines, banner ads, affiliate websites and comparison-shopping websites. In this paper, we investigate whether knowing what channels a consumer used on their path until a point of time is predictive of their future browsing patterns and purchase conversion on the website. We propose a model in which the browsing patterns and conversion are stochastically dependent on the sequence of channels the consumer has used up to this point. Important features of our model are that we allow for clustered visits by consumers, which enables separation of their browsing patterns into intra- and inter-session components, and that channels can be evaluated using multiple metrics such as visit frequency and conversion. We estimate the model on a dataset obtained from an online retailer selling a durable good and find that information on both the identities and the frequencies of the channels through which consumers visited has significant predictive power for future conversion behavior. We find that channels may act as “closers” or “engagers” — consumers arriving through the former are more likely to make a purchase, while consumers arriving through the latter, even if they do not make a purchase, are more likely to visit again in the future or extend the current session. We discuss several managerial implications of the model including model based visualizations, landing page design, multi-dimensional propensity scoring, and the use of the model to evaluate a policy change regarding the encryption of channel information.

Using loyalty card records and machine learning to understand how self-medication purchasing behaviours vary seasonally in England, 2012–2014

This paper examines objective purchasing information for inherently seasonal self-medication product groups using transaction-level loyalty card records. Predictive models are applied to predict future monthly self-medication purchasing. Analyses are undertaken at the lower super output area level, allowing the exploration of ˜300 retail, social, demographic and environmental predictors of purchasing. The study uses a tree ensemble predictive algorithm, applying XGBoost using one year of historical training data to predict future purchase patterns. The study compares static and dynamic retraining approaches. Feature importance rank comparison and accumulated local effects plots are used to ascertain insights of the influence of different features. Clear purchasing seasonality is observed for both outcomes, reflecting the climatic drivers of the associated minor ailments. Although dynamic models perform best, where previous year behaviour differs greatly, predictions had higher error rates. Important features are consistent across models (eg previous sales, temperature, seasonality). Feature importance ranking had the greatest difference where seasons changed. Accumulated local effects plots highlight specific ranges of predictors influencing self-medication purchasing. Loyalty card records offer promise for monitoring the prevalence of minor ailments and reveal insights about the seasonality and drivers of over-the-counter medicine purchasing in England.

The Detrimental Effect of Customer Demotion on Customer Profitability in Hierarchical Loyalty Programs

Firms employing hierarchical loyalty programs (HLPs) periodically demote customers from higher to lower status level to divest from unprofitable customers and boost profitability. However, existing literature lacks objective evidence on how customer demotion affects demoted customers’ future purchase behaviors and ultimately profitability for the firm. Moreover, customers in the HLP’s higher position may respond to customer demotion differently from those in the HLP’s lower position. Drawing upon emotions and equity theories, this study quantifies how the profits that customers contribute to the firm change after customer demotion, and compares demoted customers’ behavioral reactions from top-tier with those from bottom-tier based on customers’ actual behavior data from a major retail bank in South Korea. The findings show that withdrawing customer status actually deteriorates customer profitability, and customers with top-tier status decrease their profitability more dramatically than those with bottom-tier status after demotion. The results contribute to previous literature on customer demotion and relationship marketing, and provide specific guidelines into how firms should design and implement customer demotion in HLPs.

The Detrimental Effect of Customer Demotion on Customer Profitability in Hierarchical Loyalty Programs

Firms employing hierarchical loyalty programs (HLPs) periodically demote customers from higher to lower status level to divest from unprofitable customers and boost profitability. However, existing literature lacks objective evidence on how customer demotion affects demoted customers’ future purchase behaviors and ultimately profitability for the firm. Moreover, customers in the HLP’s higher position may respond to customer demotion differently from those in the HLP’s lower position. Drawing upon emotions and equity theories, this study quantifies how the profits that customers contribute to the firm change after customer demotion, and compares demoted customers’ behavioral reactions from top-tier with those from bottom-tier based on customers’ actual behavior data from a major retail bank in South Korea. The findings show that withdrawing customer status actually deteriorates customer profitability, and customers with top-tier status decrease their profitability more dramatically than those with bottom-tier status after demotion. The results contribute to previous literature on customer demotion and relationship marketing, and provide specific guidelines into how firms should design and implement customer demotion in HLPs.

A size and impact analysis of digital footprints

Personal information accessible online can be known as a digital footprint. While most of us have a digital footprint in today's technological society, few if any, know what it encapsulates or how to manage it. Technology and personal information are becoming more intertwined as we become more dependent on technology with everyday activities. In addition to basic information such as names, addresses, and phone numbers; personal information also includes one's demographic, interests and shopping history which is used by businesses to track consumers spending and even predict future purchases. With such wide variety of personal information being captured and exposed online, not all are equally valuable or personally unique. This study proposes methods to identify the content, size and impact of an individual's digital footprint by measuring the discoverability of various types of personal information.

Digitalizáció hatása a hazai kereskedelmi stratégiákra

Tanulmányunk célja, hogy feltérképezzük a digitális tér illeszkedését napjaink és a jövő kereskedelmébe és meghatározzuk a digitalizáció hatását a hazai kereskedelmi stratégiákra. A fogyasztók információszerzési és vásárlási szokásai drámaian megváltoztak. A ma fogyasztója számára elsősorban a kényelem, a hatékonyság (a termékhez való gyors, kényelmes hozzáférés a megfelelő ár-érték arányban) és az élmény jelentik azokat a kulcstényezőket, melyek alapján döntését meghozza. A kereskedők igazodva ezekhez újszerű kereskedelmi stratégiákat alakítottak ki, melyeknek szerves része a digitalizáció vívmányainak felhasználása. Ennek egyik vetülete az e-kereskedelem egyre erőteljesebb globális fejlődése. A hazai online kereskedelem is évről évre jelentősen bővül. 2018. évi adatok alapján a belföldi és külföldi online értékesítés volumene meghaladta az 1000 milliárd forintot. A hazai online fogyasztók egyre gyakrabban és egyre nagyobb értékben vásárolnak az interneten. Az online bevásárlás virtuális valóság platformokon való megvalósulása pedig élményszerűbbé teheti ezt a vásárlási módot. A webshopoknak újabb fogyasztói igényeknek kell megfelelni és a megrendelt árut mielőbb, lehetőleg 24 órán belül kiszállítani. A csomagok kézbesítésének számos változata kezd egyre népszerűbbé válni (pl. csomagautomaták, pick pack pontok). A hagyományos csatornákat sem szabad azonban eltemetni. Óriási előnyük, hogy a vásárló több érzékszerven keresztül válogathat a termékek között és az impulzusvásárlásnak is nagyobb teret enged. Ezt a kor követelményeinek megfelelő digitális technológiával kombinálva teljes körű vásárlási élmény nyújtható. Felismerve ezt az igényt az online és hagyományos csatornák manapság sok esetben már keverednek (pl. multichannel, omnichannel, crosschannel) és rengeteg lehetőséget nyújtanak a fogyasztóknak a vásárlási folyamat során. A vásárlók kényelmét szolgálja a hagyományos üzletek eladóterének optimalizálása és a vásárlói útvonalak digitális technológiákkal (pl. digitális polccímke) való támogatása is. Az újabb innovációk a vásárlási folyamat automatizációját vonják maguk után és szenzorok (pl. Amazon Go) vagy robotok (pl. Pepper) segítségével teszik kényelmesebbé és személyre szabottabbá a vásárlási folyamatot. A digitális személyi asszisztensek az eladószemélyzet digitális változataként fognak feltűnni a jövőbeli vásárlásaink során.

Initial Coin Offerings (ICOs): benefits, risks and success measures

The initial coin offering is usually defined as a new, innovative way of raising funds used by organizations, companies, or entrepreneurs, attracting funds through a cryptographic exchange in exchange for the coins that can be sold, used for future products or services purchase or profit. This article provides an overview of the evolving ICO market and indicates the main advantages and risks of the ICO. It is pointed out that ICO offers many advantages, such as high liquidity, return on investment, availability, fast capital raising process, minimization of capital raising costs. Nonetheless, the noticeable benefits of ICOs are often available only when companies or investors agree to take considerable risks, caused by the information asymmetry, lack of investor protection, proper regulation and methodical guidance both for investors and entrepreneurs. Considering the novelty, volatility, emerging risks, growing popularity of the ICO market and the lack of research in the scientific literature, it is important to investigate the factors that influence the success of the ICO, which is usually defined as the amount of funds attracted, listing of the coins, return on investment, market capitalization or the duration of the ICO.

Self-indulgence and purchasing behavior toward fast moving consumer goods (FMCG) during the inflation time

Inflation is no longer a new thing to Vietnam. Vietnam was in the top ten countries in the world which had the highest inflation rate in 2011 and the threat of inflation always exists till now. Vietnamese consumers, as a result, prepared themselves to cope with the tough economic time. This study’s aim is to study the attitude and behavior of Vietnamese consumers when buying FMCG categories during the inflation time. The research classifies whether Vietnamese consumers have any change in purchase behavior during inflation versus a normal economic situation and their future purchase intention in correlation with their perception towards future macro economics’ context. The study includes the research on several aspects such as the consumers’ attitude towards economy status, needs of self-indulgence, and the change in consumers’ FMCG spending during inflation time as well as their concerns about their future FMCG purchase.

Изучение потребительского опыта на российском рынке интернет-торговли: тестирование модели пути потребителя

The internet-retailing market is rapidly developing in the recent years, with an increasing number of consumers making online purchases. Growing market competition brings about greater variety of products and brands, growing purchasing power and the possibility to switch to competitors' products in the internet. All these make the research on a consumer journey in the internet-retailing market relevant. This article presents the study of a consumer journey in the Russia's internet-retailing market. The results of the empirical research are based on the responses of 2567 consumers. To analyze the consumer journey, we use several quantitative methods: descriptive statistics, analysis of variance and Tukey's a posteriori multiple comparison test. In the course of the analysis, we describe four stages of consumer journey, as well as the main factors of loyalty formation. We identify groups of consumers that differ in their intention for future purchases and loyalty level based on the analysis of purchases' frequency. The findings may be useful for further research on a consumer journey in the Russian internet-retailing market.

RETRACTED: Understanding the determinants and outcomes of internal reference prices in pay-what–you-want (PWYW) pricing in tourism: An analytical approach

Abstract A coherent body of research recognizes the importance of pay-what-you-want (PWYW) pricing in marketing. However, while numbers of research of PWYW pricing exist in marketing, empirical investigation of PWYW pricing in tourism has received less attention. Accordingly, this research investigates the antecedents and consequences of internal reference price (IRP) in PWYW pricing in tourism. The mediating role of IRP is also explored in this research. This research was conducted using data collected from 337 tourists purchasing souvenir products from multiple tourists’ destinations. Confirmatory factor analysis and structural equation modeling found that altruism and social desirability have a positive effect and price consciousness has a negative effect on IRP in tourism. Similarly, IRP has a positive effect on willingness to pay and future purchase intention. IRP also have a mediating effects on the relationships between antecedents and outcome variables. This paper contributes by examining the innovative pricing in tourism marketing.

To Defend or Not to Defend? How Responses to Negative Customer Review Affect Prospective customers' Distrust and Purchase Intention

Negative online reviews are a ubiquitous problem that affects every online seller at some point. It can lead to prospective consumers' distrust and decrease future purchase intention. Therefore, formulating a proper response is essential for minimizing these negative effects. Based on the ability–motivation paradigm and stability attribution, we find that apology works better when the alleged cause is relatively unstable (e.g., competence-based negative review) and when the seller has a high ability to change. However, when the alleged cause is relatively stable (e.g., integrity-based negative review) or when the seller has a low ability to change, we show that it is better for the seller to defend its reputation. In addition, we demonstrate that a remedial action plan in the seller's response can reinforce the motivation to change communicated through apology. Thus, coupled with a remedial action plan, apology works better than defending one's reputation, regardless of the negative online review type.

The Influence of Adtrust (Trust In Advertising) on Current and Future Purchases of Consumers: A Study of Hair Products in Pakistan

With a vast range of choices available for products from low to high involvement, one of the factors to initiate a purchase is the product’s advertising technique, which can even go wasted if the potential consumers of the product lack trust in the information conveyed through its advertisement. This paper attempts to investigate the impact of consumer trust in advertising on purchase behavior of hair products (shampoos) in Pakistan, and aims to look at their relationship through the moderators of gender and age. The target population for the study is consumers of various shampoo brands available for use and being advertised in Pakistan. The sample comprises of 200 respondents belonging to different demographic categories from Karachi, where all the various forms of advertisement media are in function at large. Data was gathered through a structured questionnaire filled by the respondents, bearing 23 items related to the independent variable of Trust in Advertising and the dependent variable of Consumer Purchase Behavior (current and future purchase). After the analysis of data, the results showed that trust in advertising and purchase behavior have significant relationship with each other, but only the sub-variable of Affect bears significant impact on purchase behavior. With a vast range of product choices available from low to high involvement, product brands and advertising companies should take into account the trust factor at large, otherwise potential consumers of the product might become disloyal if they lack trust in the information conveyed through its advertisement

Online Experience in Last-Mile Delivery and Future Purchase Intentions in Pakistan: The Role of Customer Satisfaction

In the new market environment, customer experience has become a source of competitive advantage. The purpose of this paper is to understand the role of post-purchase logistic services on customer satisfaction and future purchase decision in Pakistan. For this, we modified the Cao et. al. (2018) model and established the empirical validity of Pakistani customers. We proposed that customers’ overall online experience affects the customers' perception of logistical services of last-mile delivery. They included Availability of Final Delivery Facilities (AFDF), Return (R), Shipping (S), and Tracking (T). These logistic services would enhance customer satisfaction (CS), which would in turn affect Future Purchase Intention (FPI). Using a validated survey instrument, 200 respondents in Karachi are collected who do online shopping. The research model is analyzed using confirmatory factor analysis and structural equation modeling. The structural equation analysis of the study found that online experiences positively affect all four logistic experiences, each of these four has a significant positive effect on customer satisfaction, and onwards to future purchase intention. Hence, the positive effect of online experience on FPI is positively mediated by R, S, T, and AFDF, in the first order, then by CS in the second order. Hence, the understanding of last-mile delivery enhances the relationship here between perception and the efficiency of the customer's online shopping experience as well as the satisfaction of customers. Technology has provided a greater degree of importance to the end-user sector for transportation carriers.

Data-Driven Approaches to Targeting Promotion E-Mails: The Case of Delayed Incentives

This paper empirically investigates using the e-mail channel to target customers with a delayed incentive promotion—specifically, gift card promotion—and derives data-driven e-mail targeting policies. Gift card promotions are popular across retailers because they incentivize customers to spend more than a fixed expenditure level on regularly priced products by rewarding customers with a gift card to be redeemed against a future purchase. The e-mail channel provides retailers with new sources of customer-level data, which enables better prediction of customers’ responsiveness to e-mails (e.g., clicking) and the sales promotion that comes with it (e.g., participation in the promotion). We formulate the retailer’s promotion e-mail targeting problem by maximizing two objectives—the promotion’s profitability (i.e., profit-based targeting) and e-mail click-through rate (i.e., CTR-based targeting). We also take into account the retailer’s promotion budget and exclusivity concerns in targeting e-mails. We use a comprehensive dataset from a Fortune 500 luxury fashion retailer’s online channel and utilize both parametric and non-parametric methods to predict customers’ response to promotion e-mails. Our data-driven targeting policies improve the promotion’s profitability by 5.57% and e-mail CTR by 472.57%, on average, compared to our partner retailer’s current e-mail policy. We also find that the CTR-based targeting policy lowers promotion profitability by, on average, 9.09% compared to the profit-based one. However, the CTR-based policy recuperates the short-term losses in the long-term and increases long-term profitability by 3.94%, on average, compared to the profit-based targeting policy.