This article has been reviewed according to Science X's editorial process and policies. Editors have highlighted the following attributes while ensuring the content's credibility: Research involving Durham University Business School reveals how retailers target customers most likely to spend more. Shoppers who take a more carefree approach to spending are more likely to receive personalized discount codes from retailers, according to the research.
The paper is published in the Journal of Business Research. Arezou Ghiassaleh from the Business School, alongside professor Amanda Jiang from Newcastle University Business School and Ji Yan from the University of Galway. Their research examined how "spend more, save more" promotions influence customer behavior and retailer profits.
The researchers found that some consumers spend substantially more than the minimum amount required to unlock a discount, while others stop much closer to the spending threshold. These promotions can include "3 for 2" deals or discounts like "save $10 when you spend $50." To better understand how minimum purchase requirement discounts affect purchasing decisions, the team analyzed data from a leading U.K. supermarket chain. They examined the impact of these promotions across a range of fast-moving consumer products.
The research identified two broad groups of consumers: cautious shoppers and carefree shoppers. Cautious shoppers tend to spend only slightly above the threshold needed to qualify for a discount. In contrast, carefree shoppers often spend significantly more than the required amount.
The findings suggest that carefree shoppers generate greater profits for retailers because they continue spending well beyond the discount threshold. As a result, they may generate greater revenue for retailers when minimum purchase requirement promotions are used. The researchers say the results demonstrate how retailers can use customer behavior data to tailor offers to consumers who are most likely to increase their spending.
The researchers also found that the effectiveness of these promotions depends heavily on the type of product being sold. For so-called "preventive" products, such as sunscreen, insurance, helmets and health supplements, spend-more-to-save-more offers had little impact on consumer spending. In contrast, customers were much more likely to exceed spending thresholds when purchasing "promotional" products, including cosmetics, soft drinks, jewelry and experience-based purchases.
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