A Study of the Group Buying Feature of Social Coupons Using Augmented Clickstream Data

37 Pages Posted: 23 Dec 2014

See all articles by Mandy Hu

Mandy Hu

The Chinese University of Hong Kong (CUHK) - Department of Marketing

Yuanyuan Man

The Chinese University of Hong Kong (CUHK)

Russell S. Winer

New York University (NYU) - Department of Marketing

Date Written: December 23, 2014

Abstract

Groupon pioneered a new business model which combines the features of daily deals and group buying. This so-called social coupon industry has experienced explosive growth in recent years. In this paper, utilizing a large proprietary dataset of Groupon users, the authors develop three hypotheses about how the group buying features affect consumer behavior. This study is the first to empirically investigate social coupon-related consumer behavior based on detailed consumer-level data. Their findings are as follows: (1) contrary to their theoretical predictions, group buying does not stimulate referrals, no matter whether the deal is tipped (enough people have purchased the deal before it kicks in) or not; however, (2) the information from the deal that is tipped increases deal purchase probability by removing a consumer’s uncertainty about whether the deal will eventually tip and it accelerates deal purchase speed; and (3) the information from prior purchases affects an individual’s purchase decision through the mechanism of herding rather than social learning. These findings together suggest that the group buying features of social coupons change consumer behavior and affect sales. This study also provides an example of using web analytics tools to augment clickstream data and consolidate information from other sources.

Keywords: Social Coupon; Daily Deal; Assurance Contract; Clickstream Data; Data Augmentation

Suggested Citation

Hu, Mandy and Man, Yuanyuan and Winer, Russell S., A Study of the Group Buying Feature of Social Coupons Using Augmented Clickstream Data (December 23, 2014). Available at SSRN: https://ssrn.com/abstract=2542037 or http://dx.doi.org/10.2139/ssrn.2542037

Mandy Hu (Contact Author)

The Chinese University of Hong Kong (CUHK) - Department of Marketing ( email )

Room 1101, 11/F, Cheung Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
China

Yuanyuan Man

The Chinese University of Hong Kong (CUHK) ( email )

Shatin, N.T.
Hong Kong
Hong Kong

Russell S. Winer

New York University (NYU) - Department of Marketing ( email )

Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States
212-998-0540 (Phone)
212-995-4006 (Fax)

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