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We all know them, the on sale signs that are attached to the supermarket shelves with the offer of the week. It seems to be a very effective way of advertising. However, research by Professor Koert van Ittersum and Daniel Sheehan (University of Kentucky) shows that for A-brands an isolated promotion is more effective.
In three different research studies, van Ittersum looked at how consumers respond to a promotional offer. Two of those studies took place online, the third in a simulated supermarket environment. Van Ittersum: "We looked at how consumers respond to an offer they receive before they find the product in the store. This shows that they are more likely to buy the product when they receive the offer, for example, via a coupon at the entrance or a message on the self-scanner, than when they are standing in front of the shelf and see that the product is on sale."
This way of advertising works especially well for A-brands. "It is effective for a product that you normally won’t buy because you find it too expensive. If you use the offer, it is still more expensive than the product you would normally buy. However, in the case of an isolated promotion, customers feel less guilty. By the time they get to the shelf, they're set on purchasing the A-brand, that's what they want. The purchase makes them feel good, they buy a product that they perceive as better than the brand they would buy otherwise."
Now that many customers are ordering their groceries online, the isolated promotions offer more possibilities. After logging in, the supermarket can already show the customer an offer. It may be based on, for example, previous purchases. According to van Ittersum customers are less impulsive when buying online. "On the other hand, the supermarket has more customer purchase data and the data can be analyzed more easily and they can adjust the offer accordingly."
Professor Koert van Ittersum k.van.ittersum rug.nl
The article is available upon request.
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