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Grocery retail loyalty program effects: self-selection or purchase behavior change?

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Abstract

In the retail sector, consumers typically patronize multiple outlets for a variety of products, which raises the important issue of how outlets can gain a greater share of consumer expenditures. One such way is to increase repeat purchases through loyalty programs. This article examines the impact of loyalty programs, which target existing customers, on repurchase behavior in grocery stores. It finds that heavier, more frequent customers of a store enroll in the loyalty program earlier; that buying behavior changes only slightly after buyers join the program; and that small changes in loyalty appear to erode 6–9 months after buyers join.

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Acknowledgements

The author expresses his warmest thanks to MarketingScan company and an anonymous retailer for kindly providing data. He also is grateful to the anonymous reviewers.

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Authors and Affiliations

  1. Department of Management and Cognition Sciences (EA 2043, Laboratoire Gestion & Cognition), University Toulouse III Paul Sabatier, Toulouse, France

    Lars Meyer-Waarden

  2. University Paris 10, Nanterre, France

    Christophe Benavent

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  1. Lars Meyer-Waarden
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  2. Christophe Benavent
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Correspondence to Lars Meyer-Waarden.

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Meyer-Waarden, L., Benavent, C. Grocery retail loyalty program effects: self-selection or purchase behavior change?. J. of the Acad. Mark. Sci. 37, 345–358 (2009). https://doi.org/10.1007/s11747-008-0123-z

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