Lead Offer Spillovers

Abstract

Price promotions are typically offered in groups on websites, mailings and circulars, but little is known about how promotional offers in near proximity affect each other. Across two large-scale field experiments (N=66,184) conducted on a multi-brand coupon website, we find that when lead promotions offer high-value deals, consumers are more likely to print subsequent offers, a finding we call a "lead offer spillover." In the first field experiment, doubling the value of three lead offers increased the printing of subsequent offers by 18% and redemptions by 12%. In the second, doubling the value of a single lead offer increased subsequent offer prints by 12%. Additional analyses and experiments indicate that larger lead offers increase consumer search for subsequent offers and are not primarily driven by changes in evaluative judgments or complementarities between lead and subsequent offers.

Keywords: price promotions; consumer search; attention; spillovers; field experiments; lab experiments

JEL Classification: M30, M31