Lesson for Mobile Marketers: Persuade In-store Shoppers to Travel Farther
Written by American Marketing Association
Wednesday, 13 March 2013
New study from NYU Stern, University of Pittsburgh, Drexel University, and University of Texas shows that mobile promotions, which encourage additional in-store travel, increase unplanned spending.
CHICAGO, March 13, 2013 -- In a recent study published by the American Marketing Association, Professor Sam Hui of the NYU Stern School of Business and co-authors Jeffrey Inman at the University of Pittsburgh's Katz Graduate School of Business, Yanliu Huang at Drexel University's LeBow College of Business and Jacob Suher at the University of Texas at Austin,
found that mobile promotions, which persuade shoppers to travel farther
within a store, can significantly increase unplanned spending.
Retailers have long held the belief that encouraging customers to
travel more of the store will lead to increased purchases. One age-old
example is how supermarkets stock milk at the rear of the store. Until
now, that assumption has never been formally tested. In the first study
of its kind, Professor Hui and his co-authors used radio frequency
identification (RFID) tracking to collect in-store consumer path data
and conducted a field experiment to examine the effect of in-store
travel on unplanned spending. They found:
On average, shoppers travel approximately 1,400 feet in a grocery store.
Traveling an additional 55 feet in the store generates around $1 in additional unplanned spending.
Simulations based on the researchers' estimates suggest that
strategically promoting three product categories via mobile promotion
may increase unplanned spending by more than 16 percent.
The research team conducted a field experiment to assess the
effectiveness of mobile promotions and found that a coupon that requires
shoppers to travel farther from their planned path results in a
substantial increase in unplanned spending ($21.29) versus a coupon for a product near their planned path ($13.83).
So what opportunities does this create for marketers?
"As smartphones proliferate and apps, such as FourSquare and Local
Response, become ubiquitous, marketers are seizing this moment to
enhance their location-based mobile marketing strategies," explains
Professor Inman. "Retailers have the ability to target their promotions
in ways that weren't possible before, and our study provides a roadmap
for mobile marketers who seek to increase unplanned spending in stores,"
adds Professor Hui.
About the American Marketing Association:
The American Marketing Association (AMA) is the professional
association for individuals and organizations who are leading the
practice, teaching, and development of marketing worldwide. Learn more
at marketingpower.com.
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