Redemption, Exposure, and Spillover Effects of Electronic Coupons: An Empirical Analysis

52 Pages Posted: 14 Jun 2018 Last revised: 13 Aug 2020

See all articles by Chencheng Fang

Chencheng Fang

Tong Ji University

Yuliang Oliver Yao

Lehigh University

Jiantong Zhang

Tong Ji University

Date Written: May 30, 2020

Abstract

Coupon promotions have been increasingly used with the development of electronic commerce technologies. The outcomes of the long-term effect of coupon promotions have been mixed, likely due in part to the challenge in data and methodology. Using two field experiments at a firm that owns and operates a large online classified ads website, we examine exposure, redemption and spillover effects of coupon promotions. We find negative exposure effect and positive redemption effect. For customers who received coupons but did not redeem them (i.e., exposure effect), they purchased less than those who did not receive coupons; and for the customers who redeemed coupons (i.e., redemption effect), they purchased more than those who did not redeem them. The exposure effect can potentially reduce the customer’s purchases by as much as 16.31% and the redemption effect can potentially increase the customer’s purchases by as much as 10.37%. We also find that the positive redemption and negative exposure effects extend to other products that are not on promotion (i.e., spillover effect). Managerial and theoretical implications are discussed.

Keywords: Electronic Coupons, Exposure Effect, Redemption, Spillover Effect, Field Experiment

JEL Classification: M37

Suggested Citation

Fang, Chencheng and Yao, Yuliang and Zhang, Jiantong, Redemption, Exposure, and Spillover Effects of Electronic Coupons: An Empirical Analysis (May 30, 2020). Available at SSRN: https://ssrn.com/abstract=3187330 or http://dx.doi.org/10.2139/ssrn.3187330

Chencheng Fang (Contact Author)

Tong Ji University ( email )

1239 Siping Road
Shanghai, 200092
China

Yuliang Yao

Lehigh University ( email )

621 Taylor Street
Bethlehem, PA 18015
United States

Jiantong Zhang

Tong Ji University ( email )

1239 Siping Road
Shanghai, 200092
China

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