Identifying omnichannel deal prone segments, their antecedents, and their consequences

Valentini, Sara; Neslin, Scott A.; Montaguti, Elisa

Today's retail promotional environment is driven by channel proliferation, customer channel preferences, and managers’ efforts to create a unified “omnichannel” customer experience. This paper identifies the omnichannel deal prone segments that emerge in this environment, that is, segments that employ multiple channels to procure and use promotions. We describe these segments, measure the motivations, opportunities, and abilities (MOA) associated with segment membership, and quantify how these segments respond differently to promotions. We apply latent class cluster analysis to a database of over 1,000 respondents in three product categories. We find a rich array of omnichannel deal prone segments. Interestingly, 82% of consumers have bifurcated into online- or offline-focused deal prone segments. That is, most consumers use multiple channels to procure and use promotions, but they focus on either online or offline channels. Only seventeen percent of consumers strongly utilize both online and offline channels. We find that opportunity factors such as access to physical stores, and ability factors such as online shopping experience, explain this finding. We discuss how our results enable managers to target the right promotion designs to the right customers through the appropriate channels.