Value of Promotions with Delayed Incentives: An Empirical Investigation of Gift Card Promotions
Synopsis
This paper empirically tests and quantifies the causal effects of gift card promotions on retailers' revenue and customer purchase behavior. By collaborating with a major U.S.-based fashion retailer, the authors analyze the impact of gift card promotions on revenue, customer preferences, and expenditure. They find that gift card promotions increase the retailer's revenue, with the effect magnitude reducing with customers' recency of purchase. The study also explores the impact of gift card promotion emails on customer behavior and the profitability of gift card redemption.
Joint work with: Bharadwaj Kadiyala and Özalp Özer
Bio
A. Serdar Şimşek is an Assistant Professor of Operations Management at the Naveen Jindal School of Management, University of Texas at Dallas. His research focuses on understanding and improving firms' pricing decisions in retail and business-to-business markets. He has published in journals such as Management Science, Operations Research, and Manufacturing and Service Operations Management.
The paper is available on SSRN here.
