Publication:
The effectiveness of random discounts for migrating customers to the mobile channel

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2020-03-01
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Elsevier
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Abstract
Omni-channel literature shows that customers’ adoption of the mobile channel results in higher purchase frequencies and amounts. Firms can thus benefit from channel migration strategies that effectively steer customers to the mobile channel. However, little is known about the effectiveness of various channel migration strategies. In line with prior research, we identify rewards as the most effective mobile channel migration strategy for Eastern customers because they induce less psychological reactance than forced or punishment-based strategies. We further extend knowledge by identifying random discounts as the most effective reward-based strategy and revealing risk averseness as moderator. Specifically, we show that random discounts specifying a minimum value are effective in migrating risk-seeking and risk-averse customers. These findings contribute to knowledge on channel migration, the use of uncertainty in promotions, and psychological reactance. They also provide actionable insights for managers by establishing mechanisms to migrate risk-averse and risk-seeking customers to the mobile channel.
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Channel migration, Random discounts, Mobile channel, Mobile payment, Risk averseness, Psychological reactance
Bibliographic citation
De Vries, E. L. E., & Zhang, S. (2020). The effectiveness of random discounts for migrating customers to the mobile channel. Journal of Business Research, 110, pp. 272-281.