Store deal prone shoppers: motivators and implications for the supply chain in a distressed market

Abstract

The article identifies the determinants of why shoppers visit multiple (many) stores specifically to purchase special offers in the context of the Irish market which was undergoing deep economic change. It is proposed that knowledge of this segment's behaviours in a very difficult market environment will resolve some of the identified problems associated with promotional forecasting by providing a more structured approach to the formulation of judgement-based adjustments to statistical forecasts. Based on marketing and economic theory, the article develops a model of shoppers' store deal proneness (SDP). The model is then tested using structural equation modelling based on a sample size of 178 respondents. Shopping enjoyment, household financial pressures and the opportunity cost of price search were the key determinants of this behaviour. The findings also show that customer's willingness to trade down to lower quality goods for lower prices encouraged multiple store visits. This propensity to trade down on quality was encouraged by financial pressure. The model developed explained over 80% of the variation in the SDP. Comparisons between the stores in the analysis show significant differences in both SDP and the number of stores visited over a four‐week period. The findings suggest that if the low projections for economic growth over the next few years prove to be correct, the supply chain will have to contend with more variation in demand at consumer level as shoppers expand their store repertoires to benefit from promotional deals.

Keywords:

• grocery
• supply chain
• promotion
• store deal proneness
• forecast
• shopper behaviour

Acknowledgment

The authors would like to acknowledge the very helpful comments and insights made by the reviewers of an earlier version of this article.