۱- Introduction

۲- Literature review

۳- Theoretical background and model

۴- Data

۵- Estimation, results, and discussion

۶- Conclusion, managerial implications, and further research

References

Abstract

This study identifies hidden classes of grocery shoppers and their choice of different items on different days of the week. Following the literature on consumer grocery shopping, three major groups of products are considered: food/drink, cleaning, and personal care. Applying Finite Mixture Modeling to a rich scanner dataset, latent classes of customers and their choice of grocery items on different days of the week are discovered and empirically validated. The model controls for consumer unobserved heterogeneity and demographic characteristics through mixing probabilities. Results uncover latent classes of grocery shoppers and their day of the week shopping day, their sizes, their product choices, mixing probabilities, and demographics. Findings offer retail promotion targeting guidelines for the identified latent classes in the food/drink, cleaning, and personal care groups. Analysis outcome provides marketing and managerial implications in identifying grocery store segments, handling store traffic, managing store promotion and pricing, and improving store layout.

Introduction

Imagine a grocery store which customizes your shopping experience by offering personal deals to you the second you walk in the store! The idea might seem far-fetched at first since the store manager would need to know which customer is interested in deals on what items and when she is going to do her grocery shopping and purchase those items. Upon deeper contemplation, nonetheless, the store manager might be able to come up with an answer to this question provided that he has access to the right data and is able to employ the appropriate tools. The present research focuses on answering this question by unveiling the characteristics of grocery shoppers who buy specific products on particular days of the week in an effort to help the grocery store managers microtarget their promotional activities towards these different groups of customers at the right time and for the right product categories. The results of this research have important implications for academicians and practitioners who are interested in particularities about grocery shoppers segments’ characteristics, basket composition, and day of purchase, and how this information could lead to better micro-marketing strategies. Although grocery shopping behavior is an important aspect of studying consumer choice behavior, few studies have focused on investigating the behavior of grocery shoppers search and choice using multiple determinants for individual customers.