Do Promotions Increase Store Expenditures? A Descriptive Study of Household Shopping Behavior
An important question for retailers is whether promotions induce households to increase their in-store expenditures or merely reallocate a predetermined shopping budget. Should expenditures be fixed, retailers might decrease their profitability when running promotions by displacing expenditures from high margin to lower margin products. Using household level store receipts and an extended AIDS model, we provide evidence that while household expenditures do increase with promotions, there is also a significant reallocation of expenditures among the different categories. This implies that retailers have to choose carefully which products are promoted, if promotions are to increase profits.
Year of publication: |
2004
|
---|---|
Authors: | Drèze, Xavier ; Nisol, Patricia ; Vilcassim, Naufel J. |
Published in: |
Quantitative Marketing and Economics. - Springer, ISSN 1570-7156. - Vol. 2.2004, 1, p. 59-92
|
Publisher: |
Springer |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Beyond promotion-based store switching : antecedents and patterns of systematic multiple-store
Gijsbrechts, Els, (2006)
-
Gijsbrechts, Els, (2007)
-
Gijsbrechts, Els, (2008)
- More ...