Tuesday, December 22, 2009

Innovative marketing

Recently at my parents house an advertisement for Genaurdi's came in the mail with two coupon codes for online grocery shopping. The first coupon is for $10 off and expires 12/31. The second coupon is for $5 off and expires 10 days later.

I have frequently seen ads for some discount on your first grocery delivery order and I have never taken advantage of them. I think a lot of the reason I have not is that there is a large effort cost in making an online grocery purchase when you are used to real life grocery shopping. Choosing items from a list online is a lot harder than choosing them in a store, at least when you are used to choosing them in a store. The effort cost difference between online grocery shopping and real life grocery shopping presumably stabilizes over time, but the initial additional cost for online grocery shopping does act as a barrier of entry for the consumer.

The Genaurdi's coupons go further in trying to transfer the consumer entry cost to the producer than the coupons which offer only a discount on the first order. The first online order is probably the most costly absent of coupons, but the second probably also has greater effort cost than the steady state online grocery order. Genaurdi's compensates consumers for the greater effort cost of the second online purchase as well, but compensates them less than for the first purchase.

From a marketing perspective, these coupons also make sense. Someone that makes just one online purchase of groceries and finds it difficult because of the large effort cost of that first online order is likely not to return to make another without additional incentives. However, someone that returns to make a second purchase and finds it much easier than the first purchase seems much more likely to continue purchasing online groceries without coupons than someone who only receives a coupon for the first order. Thus, marketers should not only be focused on getting consumers to make a first purchase of online groceries, but also a second.

2 comments:

  1. When you buy groceries online, can you throw the cans on the ground to dent them and get half off?

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  2. Maybe you could post a derogatory comment about the product and get it half off?

    ReplyDelete