Using supermarket loyalty card data to analyse the impact of promotions

Melanie Felgate and Andrew Fearne

University of Kent

Salvatore DiFalco

London School of Economics

Marian Garcia Martinez

University of Kent

Introduction

The use of promotions in retailing has increased rapidly in recent times, yet more often than not promotions are being implemented with an inadequate understanding of which mechanisms are most effective, for which products and for which shopper segments (Felgate et al. 2011). Despite this growth in the use of promotions, particularly in the fast moving consumer goods (fmcg) sector, consideration of their impact and effectiveness among academics has been limited. It has been identified as an important area for future research, as has the greater use of supermarket panel data to provide insights into how different shoppers respond to price changes, including promotions (Grewal & Levy 2009). Moreau et al. (2001) assert that a lack of understanding by retailers about consumer perceptions of promotions can lead to weaknesses in their marketing strategies. Thus, as the use of promotions continues to grow, it is increasingly important to gain a more complete understanding of how consumers actually behave in response to different promotional activities.