Socialize More, Pay Less: Randomized Field Experiments on Social Pricing

We propose social pricing, a novel pricing framework under which consumers with higher social capital enjoy a better price. Conceptually, social pricing enables firms to achieve price discrimination based on a consumer’s social value. This is in sharp contrast with traditional price discrimination strategies where price differentiation typically hinges on consumers’ personal value. We design and conduct two randomized field experiments on a leading online fresh food retailer to understand the value of social pricing. Social pricing has been commonly credited for its effectiveness in new customer acquisition. Interestingly, our study reveals that it is also highly effective on existing consumers. Our analysis shows that social pricing can increase an online retailer’s profit by 40% solely from existing consumers, compared with regular firm-offered discounts. Exploration of the underlying mechanisms reveals that perceived engagement and social cost are the main drivers, which not only help to increase purchasing frequency but also induce higher order value per purchase. In a follow-up experiment, we vary the rules of social interactions by requiring heterogeneity in consumers’ purchasing frequencies. The results suggest that a heterogeneity-based strategy can further amplify the benefits of social pricing.

Labelling or not: influence of food retailer's approaching the expiration date labelling on consumers' patronage intention

PurposeThe purpose of this paper is to investigate the influence of food retailer's Approaching the Expiration Date (AED) labelling on consumers' retailer-related response. Specifically, the main effect of food retailer's AED labelling on consumers' patronage intention, the mediation effect of food retailer's concern for consumers and the boundary condition of this effect are explored. The selected context of research is that food retailers are reluctant to stick an AED label on nearly expired food due to negative effect on selling them.Design/methodology/approachTwo separate pretests and two separate experiments have been conducted to investigate the influence of food retailer's AED labelling on patronage intention. Pretest 1 develops the stimulus material of food retailer's AED labelling. Study 1 investigates the influence of AED labelling on patronage intention and mediation effect of consumers' perception of retailer's concern for consumers. Pretest 2 develops the stimulus material of government regulation on food retailer's AED labelling. Study 2 explores the boundary condition of the positive effect, namely the moderation effect of whether retailer's AED labelling is voluntary or mandatory.FindingsThe main findings of this research highlight the positive influence of food retailer's AED labelling on consumers' patronage intention. In addition, the current research reveals the underlying mechanism food retailer's concern for consumers and the boundary condition whether the AED labelling is voluntary or mandatory.Originality/valueAlthough previous researches has explored the effect of food retailer's AED labelling on consumers' response, most of them focus on consumer purchase intention of the nearly expired food and neglect its effect on consumers' food retailer-related response. It is a need for food retailer to explore the potential positive influence of food retailer's AED labelling on consumers' patronage intention.

Exploring social media usage as a communication channel among independent food retailer SMEs in South Africa

Social media has facilitated interaction between businesses and consumers, and consequently, has seen rapid growth as a communication channel by a number of smaller retailers in South Africa. Hence, the primary research objective of this study is to explore social media usage as a marketing communication strategy by independent food retailer small to medium enterprises (SMEs). The study used a qualitative data collection strategy and in-depth interviews were conducted among eleven independent food retailer SMEs in South Africa. The study revealed that the level of social media activity by the respondent retailers was influenced by enabling factors such as cost effectiveness, accessibility, reach and relationship building, whereas perceived risk and resources such as time, knowledge and human resources were inhibiting factors. The research contributes to the available literature exploring social media usage as customer contact points for promotional purposes, as well as provides insight for further studies on the use of social media conduits by independent food retailer SMEs or similar businesses in a developing country.

Consumer Food Environment Healthiness Score: Development, Validation, and Testing between Different Types of Food Retailers

The aim of this study was to develop and validate a scoring system, based on AUDITNOVA, to assess the healthiness of the consumer food environment, considering food availability, price, advertising, and placement strategies. Audited data of 650 food retailers were used to develop, validate, and test the consumer food environment healthiness score. To compose the score, the reference was the Dietary Guidelines for the Brazilian Population. The total and subscores were standardized for a scale from 0 to 100. Construct validity was assessed using the Kruskal–Wallis Dunn tests. Cronbach’s alpha coefficients were calculated to determine the consistency of the scores. The median score was 33.7 (p25 = 26.9; p75 = 42.1). The public and private specialized indoor fresh food markets showed the highest medians; otherwise, bakeries and food retailers with the predominant sale of ultra-processed foods showed the lowest. The score was able to satisfactorily classify the extreme food retailer groups by the predominant sale of fresh or minimally processed foods and the predominant sale of ultra-processed foods. The results of Cronbach’s alpha showed excellent internal consistency (α = 0.91). The score helped to provide an overall assessment of consumer food environment healthiness and was able to classify food retailer groups as healthy and unhealthy according to the degree of processing of the available foods.

Psychological pricing in online food retail

PurposeThis study aims to analyse the use of psychological pricing in online food retailing. In stationary grocery shops, psychological prices with nine-endings have been a well-documented phenomenon for many decades. However, little is known about the relevance of this pricing practice in the growing grocery e-commerce sector.Design/methodology/approachThe authors investigate the frequency of nine-ending prices at Amazon Fresh for more than 10,000 products from May 2019 until March 2020 for the customer location Berlin, Germany. Applying a within–between logit model, the authors identify the determinants for the use of nine-ending prices.FindingsThe authors find that more than 70% of all prices end in the digit 9. This indicates that Amazon Fresh applies psychological pricing to a similar degree as traditional offline grocers. Nine-ending prices are more likely for so-called “want” products such as snacks and sweets than for “should” products such as fruits and vegetables. Also, psychological price endings are used less for products with a higher price level and for products with temporary sales promotions.Originality/valueThis study is the first to analyse psychological pricing practices for the world's largest online food retailer Amazon Fresh. The study results contrast with most previous empirical and theoretical studies, which suggest that the use of psychological prices would decline in an online context.

Edeka gelingt der Durchmarsch

Auf Basis des „Retailer Perception Reports“ zeichnet die GfK auch in diesem Jahr wieder den „Best Food Retailer“ Deutschlands aus. Die Studie beleuchtet, wie Leistungen von Lebensmitteleinzelhändlern von Shoppern wahrgenommen werden. Der alte und neue Sieger: Edeka.

Trends in cyclical food expenditures among low-income households receiving monthly nutrition assistance: results from a prospective study

Objective: Supplemental Nutrition Assistance Program (SNAP) benefits are rapidly depleted after distribution. This phenomenon, known as the benefit cycle, is associated with poor nutrition and health outcomes. However, to date, no study has evaluated trends in food expenditures before and after households receive benefits using prospective data, and whether these trends vary by household characteristics. Design: Generalised estimating equations were used to model weekly household food expenditures during baseline (pre-benefit) and intervention months by vendor (restaurants and food retailers). Food retailer expenditures were further evaluated by food category (fruits and vegetables and foods high in added sugar). All expenditures were evaluated by household composition, demographics and economic means. Setting: Minneapolis-St. Paul, Minnesota, metropolitan area. Participants: Low-income households (n 249) enrolled May 2013–August 2015. Results: Weekly food retailer expenditures did not vary during baseline (pre-benefit), but demonstrated a cyclical pattern after households received benefits across all household characteristics and for both food categories, particularly for fruits and vegetables. Households with greater economic resources spent more throughout the month compared with those with fewer resources. Households with lower food security status experienced more severe fluctuations in spending compared with more food secure households. Conclusions: Cyclical food purchasing was observed broadly across different household characteristics and food categories, with notable differences by household economic means and food security status. Proposed SNAP policy changes designed to smooth food expenditures across the benefit month, such as increased frequency of benefit distribution, should include a focus on households with fewest resources.

Effects of Farmers’ Facial Expression on Consumers’ Responses in Print Advertising of Local Food: The Moderating Role of Emotional Intelligence

In the context of ethical consumption, we examine the effects of farmers’ facial expression in print advertising on consumers’ responses to local food. Furthermore, we try to verify the moderating role of emotional intelligence (EI) on consumers’ responses to the advertising message strategy. The advertising message strategy that connects farmers and consumers is expected to create more favorable responses among consumers toward local food and its retailers. This study examines consumers’ responses (perceived product quality, trust, and a positive attitude toward the local food retailer) to three conditions of farmers’ facial expression in the advertisement (neutral facial expression, positive facial expression, and product only, with no portrait) across two levels of EI (low and high). We find that farmers’ positive facial expressions in the advertisements have the greatest positive effects on consumers’ perceived product quality, trust, and attitude toward the local food retailer under a high level of EI. Therefore, individuals with a high level of EI were more influenced by facial expressions in print advertising, whereas those with a low level of EI were less influenced by facial expressions in print advertising, and their responses were indifferent to whether the local food farmer had a neutral or a positive facial expression in print advertising. Our findings suggest that marketing practitioners consider personal characteristics such as EI in persuading local food consumers in target markets to implement strategies to promote local food purchase and consumption.