IDEAS home Printed from https://ideas.repec.org/a/eee/joreco/v68y2022ics0969698922001114.html
   My bibliography  Save this article

Better or Worse? Effects of online promotion habits on customer value: An empirical study

Author

Listed:
  • Wang, Qian
  • Chen, Hang

Abstract

Online frequent and uninterrupted price discounts easily cause customers to form general tendencies to purchase promotions, or ‘online promotion habits’. Compared with offline promotion shopping, the distinct features of online promotion shopping make customer behaviours highly changeable and leave the effects of online promotion habits on customer value a puzzle. Using a dataset of real transactions from a leading online apparel retailer in China, this study makes continuous observations of customers’ online promotion habits. Drawing on the behavioural learning theory, we empirically investigate the dynamic effects of online promotion habits on customer value. The results reveal that after customers form online promotion habits, their customer value increases significantly. Furthermore, among customers with online promotion habits, online promotion habits exert an inverted U-shaped effect on customer value. Namely, as online promotion habits strengthen, customer value increases accordingly, yet negative outcomes show if online promotion habits exceed a certain level. We discuss the theoretical and managerial implications of our findings, which will enable researchers and practitioners to measure and dynamically manage customers’ online promotion habits.

Suggested Citation

  • Wang, Qian & Chen, Hang, 2022. "Better or Worse? Effects of online promotion habits on customer value: An empirical study," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:joreco:v:68:y:2022:i:c:s0969698922001114
    DOI: 10.1016/j.jretconser.2022.103018
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969698922001114
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jretconser.2022.103018?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Oliver, Richard L. & Winer, Russell S., 1987. "A framework for the formation and structure of consumer expectations: Review and propositions," Journal of Economic Psychology, Elsevier, vol. 8(4), pages 469-499, December.
    2. Marta Arce-Urriza & Javier Cebollada & María Fernanda Tarira, 2017. "The effect of price promotions on consumer shopping behavior across online and offline channels: differences between frequent and non-frequent shoppers," Information Systems and e-Business Management, Springer, vol. 15(1), pages 69-87, February.
    3. Lin Jia & Xiuwei Song & Dianne Hall, 2022. "Influence of Habits on Mobile Payment Acceptance: An Ecosystem Perspective," Information Systems Frontiers, Springer, vol. 24(1), pages 247-266, February.
    4. Özalp Özer & Yanchong Zheng, 2016. "Markdown or Everyday Low Price? The Role of Behavioral Motives," Management Science, INFORMS, vol. 62(2), pages 326-346, February.
    5. Chen, Chia-Chen & Hsiao, Kuo-Lun & Li, Wan-Chen, 2020. "Exploring the determinants of usage continuance willingness for location-based apps: A case study of bicycle-based exercise apps," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    6. Richard F. J. Haans & Constant Pieters & Zi-Lin He, 2016. "Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1177-1195, July.
    7. Linda D. Hollebeek & Rajendra K. Srivastava & Tom Chen, 2019. "S-D logic–informed customer engagement: integrative framework, revised fundamental propositions, and application to CRM," Journal of the Academy of Marketing Science, Springer, vol. 47(1), pages 161-185, January.
    8. Atar Herziger & Erik Hoelzl, 2017. "Underestimated Habits: Hypothetical Choice Design in Consumer Research," Journal of the Association for Consumer Research, University of Chicago Press, vol. 2(3), pages 359-370.
    9. Glenn Ellison & Sara Fisher Ellison, 2005. "Lessons About Markets from the Internet," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 139-158, Spring.
    10. Conor M. Henderson & Lena Steinhoff & Colleen M. Harmeling & Robert W. Palmatier, 2021. "Customer inertia marketing," Journal of the Academy of Marketing Science, Springer, vol. 49(2), pages 350-373, March.
    11. Lu, Jian & Su, Xiang & Diao, Yajing & Wang, Nianxin & Zhou, Bin, 2021. "Does online observational learning matter? Empirical evidence from panel data," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    12. Maruyama, Masayoshi & Wu, Lihui, 2014. "Quantifying barriers impeding the diffusion of supermarkets in China: The role of shopping habits," Journal of Retailing and Consumer Services, Elsevier, vol. 21(3), pages 383-393.
    13. Carlson, Jeffrey R. & Kukar-Kinney, Monika, 2018. "Investigating discounting of discounts in an online context: The mediating effect of discount credibility and moderating effect of online daily deal promotions," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 153-160.
    14. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    15. Sinha, Somesh Kumar & Verma, Priyanka, 2020. "Impact of sales Promotion's benefits on perceived value: Does product category moderate the results?," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).
    16. Lee, Lynne & Charles, Vincent, 2021. "The impact of consumers’ perceptions regarding the ethics of online retailers and promotional strategy on their repurchase intention," International Journal of Information Management, Elsevier, vol. 57(C).
    17. Dennis J. Zhang & Hengchen Dai & Lingxiu Dong & Qian Wu & Lifan Guo & Xiaofei Liu, 2019. "The Value of Pop-Up Stores on Retailing Platforms: Evidence from a Field Experiment with Alibaba," Management Science, INFORMS, vol. 65(11), pages 5142-5151, November.
    18. Youngsoo Kim & Ramayya Krishnan, 2019. "The Dynamics of Online Consumers’ Response to Price Promotion," Service Science, INFORMS, vol. 30(1), pages 175-190, March.
    19. Lars Meyer-Waarden, 2015. "Effects of loyalty program rewards on store loyalty," Post-Print halshs-01260493, HAL.
    20. Kumar, V. & George, Morris & Pancras, Joseph, 2008. "Cross-buying in retailing: Drivers and consequences," Journal of Retailing, Elsevier, vol. 84(1), pages 15-27.
    21. Chang, Chun-Wei & Zhang, Jonathan Z., 2016. "The Effects of Channel Experiences and Direct Marketing on Customer Retention in Multichannel Settings," Journal of Interactive Marketing, Elsevier, vol. 36(C), pages 77-90.
    22. Nel, Jacques & Boshoff, Christo, 2019. "Online customers’ habit-inertia nexus as a conditional effect of mobile-service experience: A moderated-mediation and moderated serial-mediation investigation of mobile-service use resistance," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 282-292.
    23. Meyer-Waarden, Lars, 2015. "Effects of loyalty program rewards on store loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 24(C), pages 22-32.
    24. Dennis J. Zhang & Hengchen Dai & Lingxiu Dong & Fangfang Qi & Nannan Zhang & Xiaofei Liu & Zhongyi Liu & Jiang Yang, 2020. "The Long-term and Spillover Effects of Price Promotions on Retailing Platforms: Evidence from a Large Randomized Experiment on Alibaba," Management Science, INFORMS, vol. 66(6), pages 2589-2609, June.
    25. Ozturk, Ahmet Bulent & Bilgihan, Anil & Nusair, Khaldoon & Okumus, Fevzi, 2016. "What keeps the mobile hotel booking users loyal? Investigating the roles of self-efficacy, compatibility, perceived ease of use, and perceived convenience," International Journal of Information Management, Elsevier, vol. 36(6), pages 1350-1359.
    26. Garrido-Morgado, Álvaro & González-Benito, Óscar & Martos-Partal, Mercedes & Campo, Katia, 2021. "Which Products are More Responsive to In-Store Displays: Utilitarian or Hedonic?," Journal of Retailing, Elsevier, vol. 97(3), pages 477-491.
    27. Ieva, M. & De Canio, F. & Ziliani, C., 2018. "Daily deal shoppers: What drives social couponing?," Journal of Retailing and Consumer Services, Elsevier, vol. 40(C), pages 299-303.
    28. Liu, Huan & Lobschat, Lara & Verhoef, Peter C. & Zhao, Hong, 2021. "The effect of permanent product discounts and order coupons on purchase incidence, purchase quantity, and spending," Journal of Retailing, Elsevier, vol. 97(3), pages 377-393.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peng Vincent Zhang & Seoyoung Kim & Anindita Chakravarty, 2023. "Influence of pull marketing actions on marketing action effectiveness of multichannel firms: A meta-analysis," Journal of the Academy of Marketing Science, Springer, vol. 51(2), pages 310-333, March.
    2. Lin, Chen & Bowman, Douglas, 2022. "The impact of introducing a customer loyalty program on category sales and profitability," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    3. Chen, Yanyan & Mandler, Timo & Meyer-Waarden, Lars, 2021. "Three decades of research on loyalty programs: A literature review and future research agenda," Journal of Business Research, Elsevier, vol. 124(C), pages 179-197.
    4. Li, Xi & Dahana, Wirawan Dony & Li, Tongmao & Yuan, Jingbo, 2021. "Behavioral changes of multichannel customers: Their persistence and influencing factors," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    5. Sonja Fourie & Michael Goldman & Michael McCall, 2023. "Designing for loyalty programme effectiveness in the financial services industry," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 28(3), pages 502-525, September.
    6. Leone, Maria Isabella & Messeni Petruzzelli, Antonio & Natalicchio, Angelo, 2022. "Boundary spanning through external technology acquisition: The moderating role of star scientists and upstream alliances," Technovation, Elsevier, vol. 116(C).
    7. Jihoon Cho & Swinder Janda, 2023. "Perception carryover in cross-buying: the role of interpurchase time and product locus," Journal of Marketing Analytics, Palgrave Macmillan, vol. 11(4), pages 809-819, December.
    8. Evanschitzky, Heiner & Malhotra, Neeru & Wangenheim, Florian v. & Lemon, Katherine N., 2017. "Antecedents of peripheral services cross-buying behavior," Journal of Retailing and Consumer Services, Elsevier, vol. 36(C), pages 218-224.
    9. Mark Legg & Murat Hancer, 2020. "How patrons value casino promotional offers: A conjoint study," Tourism Economics, , vol. 26(4), pages 640-657, June.
    10. Iurkov, Viacheslav & Koval, Mariia & Misra, Shekhar & Pedada, Kiran & Sinha, Ashish, 2024. "Impact of ESG distinctiveness in alliances on shareholder value," Journal of Business Research, Elsevier, vol. 171(C).
    11. Peter Younkin & Venkat Kuppuswamy, 2018. "The Colorblind Crowd? Founder Race and Performance in Crowdfunding," Management Science, INFORMS, vol. 64(7), pages 3269-3287, July.
    12. Homburg, Christian & Böhler, Sina & Hohenberg, Sebastian, 2020. "Organizing for cross-selling: Do it right, or not at all," International Journal of Research in Marketing, Elsevier, vol. 37(1), pages 56-73.
    13. Tiphaine Gorlier & Géraldine Michel, 2020. "How special rewards in loyalty programs enrich consumer–brand relationships: The role of self‐expansion," Post-Print hal-02494605, HAL.
    14. Achim Walter & Nicole Coviello & Monika Sienknecht & Thomas Ritter, 2024. "Leveraging the Lab: How Pre-Founding R&D Collaboration Influences the Internationalization Timing of Academic Spin-Offs," Entrepreneurship Theory and Practice, , vol. 48(1), pages 71-103, January.
    15. Nusrat, Farhana & Huang, Yanliu, 2024. "Feeling rewarded and entitled to be served: Understanding the influence of self- versus regular checkout on customer loyalty," Journal of Business Research, Elsevier, vol. 170(C).
    16. Yang Zhang & Xinxin Zhang, 2022. "The Threshold Effect of Executive Compensation on Corporate Environmental Responsibility: Based on the Moderating Effect of Industry Competition," Sustainability, MDPI, vol. 14(14), pages 1-24, July.
    17. Zhang, Hongchao & Yu, Yu & Qin, Yinggao, 2023. "The effects of constrained mobile coupons in the mobile channel," Journal of Retailing and Consumer Services, Elsevier, vol. 75(C).
    18. Yingzhao Xiao & Liuyang Xue & David Ahlstrom & Chundong Zheng & Xiling Hao, 2024. "To Conform or Not to Conform? The Role of Social Status and Firm Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 193(3), pages 655-677, September.
    19. Jaeyoung Cho & Jangwoo Lee, 2020. "Speed of FDI expansions and the survival of Korean SMEs: the moderating role of ownership structure," Asian Business & Management, Palgrave Macmillan, vol. 19(2), pages 184-212, April.
    20. Ram, Pappu Kalyan & Pandey, Neeraj & Persis, Jinil, 2024. "Modeling social coupon redemption decisions of consumers in food industry: A machine learning perspective," Technological Forecasting and Social Change, Elsevier, vol. 200(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joreco:v:68:y:2022:i:c:s0969698922001114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-retailing-and-consumer-services .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.