A Data Driven Research on Online-to-Offline Coupon Redemption Behavior: The case of Alibaba.com O2O campaign design optimization for the Chinese market

Details

Supervisors

Chevalier, Philippe ; Peng, Wenli

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

This research studies the campaign design elements leading Chinese to redeem mobile coupons received on an O2O platform within fifteen days after their reception. By analyzing historical data from January 2016 to June 2016, the paper described and investigated six hypotheses. Four are related to the campaign design, one to the prior redemption behavior and one on the location information. By considering previous research, several frameworks (TRA, UTAUT, TPB), and applying a Lasso regression, a tool predicting the redemption probability of a coupon from a campaign was created. The first limitation is that sociodemographic and items' characteristics are out of our scope. First, Chinese redeems more coupons (2.34% more for minimum spending and 0.02% for a percentage-off framing) if the discount offered for minimum spending coupons increases. However, the attractiveness of a too great discount drops for minimum spending framing as it is perceived as too good to be true. At the same time, the percentage-off's face value follows a U relationship with a positive impact on redemption from 1 to 10% and between 20 to 100%. Secondly, the travel distance between a user and a merchant cuts the redemption probability by 2%. Surprisingly, a parallel phenomenon drives up the redemption likelihood if the average (0.6%) and maximum (0.4%) distance between them gets broader. In this study, Alibaba does not resort to a higher face value to attract customers located further away. Thirdly, no evidence is available to confirm a link between prior m-coupon usage and the redemption likelihood. Nevertheless, recent interactions between a consumer and the O2O platform is beneficial for further redemption. It goes against previous findings stating a loyalty build through past interactions, which will limit the redemption probability. Fourthly, designing an m-coupon campaign with an expiry date can drive redemption. All limited time offers were redeemed in this study and proved to be ten times more efficient than minimum spend framing. Besides, a face value framed in a percentage off proves to be more efficient as well. Fifthly, the Chinese would rather receive several coupons for the same item on the same day than receiving several coupons for the same merchant on the same day. The spam fear tends to appear when a certain number of m-coupons are obtained in a fifteen days time frame. Lastly, shoppers favor receiving their coupons on Saturday (8% more likely to redeem it) and on Tuesday (0.99%). Although, receiving a coupon on a Sunday is highly discouraged (3% less chance of redemption).

Citations

• APA

Carabin, K. (2020). A Data Driven Research on Online-to-Offline Coupon Redemption Behavior: The case of Alibaba.com O2O campaign design optimization for the Chinese market. https://dial-mem.test.bib.ucl.ac.be/handle/2078.2/17076