Cherry-pickers and store switchers

Date of publication: April 19, 2005

Abstract:

This paper studies the effects that consumers' adopted shopping patterns have on their responsiveness to price changes in a heavily contested FMCG category (i.e. coffee). Two dimensions of shopping behaviour inclination to switch stores, and preferences for a particular retail price format (every day low price, or EDLP, and promotional price, or HiLo) are hypothesised to systematically affect the responsiveness of in-store expenditure decisions to changes in prices. A Virtual Store methodology is used to allow for the systematic variation of Price, Store Format, and In-Store Display variables, and to capture consumer decisions about where to shop? and 'how much to buy'. The expected effects of these variables are mostly supported by the data collected in this experiment.

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