The Role of Within-Trip Dynamics and Shopper Purchase History on Unplanned Purchase Behavior
48 Pages Posted: 23 May 2014 Last revised: 22 Dec 2014
Date Written: May 21, 2014
Abstract
The recent surge in the importance of shopper marketing has led to an increased need to understand the drivers of unplanned purchases. This research addresses this issue by examining how elements of the current shopping trip (e.g., lagged unplanned purchase and cumulative purchases) and past purchases (e.g., average historical price paid by the shopper) determine unplanned versus planned purchases on the current trip. Using a grocery field study and frequent shopper data, we estimate competing models to test behavioral hypotheses using a hierarchical-Bayesian probit model with state dependence and serially correlated errors. Our results indicate that shoppers with smaller trip budgets tend to exhibit behavior consistent with a self-regulation model – an unplanned purchase decreases the probability of a subsequent unplanned purchase – but this effect reverses later in the trip. In contrast, shoppers with medium trip budgets tend to exhibit behavior consistent with a cueing theory model – an unplanned purchase increases the probability of a subsequent unplanned purchase – and this effect increases as the trip wears on. Further, factors from previous shopping trips predict unplanned purchases in the current trip, suggesting that retailers can use their frequent shopper program data to create customized shopping lists and improve the targeting of mobile app-based promotions.
Keywords: Shopper marketing; unplanned purchase; state dependence; self-regulation; cueing theory; autocorrelated probit models; Bayesian methods; licensing effect
JEL Classification: D12, M30, M31
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
An Exploratory Look at Supermarket Shopping Paths
By Jeffrey S. Larson, Eric Bradlow, ...
-
An Integrated Model of Grocery Store Shopping Path and Purchase Behavior
By Sam K. Hui, Eric Bradlow, ...
-
Path Data in Marketing: An Integrative Framework and Prospectus for Model-Building
By Sam K. Hui, Peter Fader, ...
-
The Traveling Salesman Goes Shopping: The Systematic Deviations of Grocery Paths from TSP-Optimality
By Sam K. Hui, Peter Fader, ...
-
Subjective Knowledge, Search Locations, and Consumer Choice
By Christine Moorman, Kristin Diehl, ...
-
Household Life Cycles and Lifestyles in the United States
By Rex Yuxing Du and Wagner A. Kamakura
-
By Erjen Van Nierop, D. Fok, ...
-
Cross-Category Effects of Aisle and Display Placements: A Spatial Modeling Approach and Insights
By Ram Bezawada, Subramanian Balachander, ...