Drivers of the synergy between price cuts and store flyer advertising at supermarkets and discounters

Despite retailers’ intense use of both price cuts and store flyer advertising, it is still unclear whether and when it is beneficial for retailers to combine the two promotion tools at the same time as opposed to using them separately. We systematically investigate synergies between price cuts and store flyers for a broad set of 488 brands from 44 consumer packaged goods categories across six leading German retailers. We find that a clear majority of the brands benefit from positive synergies and hence, combining price cuts and store flyer advertising is recommended, especially at supermarkets. This synergy can be strong. For instance, a 15 % price cut without store flyer support at a supermarket, on average, increases sales by 11 %, and medium spending on store flyers for the brand at its regular (non-promoted) price results in a sales lift of 8 %. The combined use of both tools, however, increases sales by 52 %, much more than the sum of their separate effects (11 % + 8 % = 19 %). Yet, there is also substantial variance in the synergy, which we explain with retailer format (supermarkets versus discounters) as well as various brand and category characteristics. Our findings have important implications for the coordination of promotion activities by retailers.     

Relative power of online buyers in regard to a store: How it encourages them to disclose their personal data?

The current study contributes to the knowledge as to how the relative power of buyers impacts their willingness to disclose personal data in online buying. The theoretical framework is based on social exchange theory, which makes it possible to consider the importance of trust in stores and perceptions about external privacy regulations. Data were collected via a representative survey (985 respondents) and analysed with the help of two-step structural equation modelling. The key findings show the presence of the indirect effect of relative power on willingness to disclose personal data (mediated by store trust), while the direct impact was found to be insignificant. It was found that store trust is built by relative power of buyers, along with their perceptions about external privacy regulations. This suggests that relative power grows when perceptions about the effectiveness of privacy regulations improve. These findings help to develop theoretical and managerial implications.