Scandinavian Working Papers in Economics

HUI Working Papers,
HUI Research

No 127: How does the use of in-store discount coupons affect retail revenues?

Madelen Lagin (), Sven-Olov Daunfeldt and Niklas Rudholm
Additional contact information
Madelen Lagin: Dalarna University, Postal: SE- 791 88 Falun, Sweden
Sven-Olov Daunfeldt: HUI Research, Postal: SE- 103 29 Stockholm, Sweden
Niklas Rudholm: HUI Research, Postal: SE- 103 29 Stockholm, Sweden

Abstract: Few studies have addressed how discount coupons placed in stores affect retailers. By conducting a field experiment in 16 grocery stores in Sweden, we investigate how in-store discount coupons for Wrigley’s chewing gums affect sales at the product, brand, product-category, and category-assortment levels. When calculating the impact of the coupon campaign on revenues, we find that there is an increase in revenues for the retailer of between 30 748 SEK and 39 691 SEK during a 30 day coupon campaign depending on if the face value of the coupon is 2 SEK or 3 SEK, respectively. The in-store coupon campaigns under study thus increased retailer revenues even after considering product-, brand- and category level cannibalization effects.

Keywords: Category management; Field experiment; Price tactic; Promotions

JEL-codes: C12; C99; D22; D40; M31

38 pages, August 30, 2017

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