Start Date
11-12-2016 12:00 AM
Description
Customer reward systems have rapidly shifted from plastic cards schemes to mobile application-based initiatives, yet our understanding of the economic value of mobile reward systems has not kept pace with this development. Using an individual-level transaction and reward redemption dataset from a large multi-brand, offline food-and-beverage merchandiser, we examine the effects of reward app adoption on customers’ offline purchase patterns and reward redemption behaviors by using a difference-in-difference method with propensity score matching. An intriguing empirical issue is whether consumers redeem their reward points more aggressively and spend more out of pocket after adopting reward apps. Our results lend support to this argument. App engagement, which is measured by the frequency at which reward apps are activated, is positively associated with increasing cash expenditure and number of points redeemed. Furthermore, our findings imply that past reward point redemption increases the level of goodwill stock, which affects future cash expenditure.
Recommended Citation
Son, YoonSeock; Oh, Wonseok; Han, Sang Pil; and Park, Sungho, "The Adoption and Use of Mobile Application-Based Reward Systems: Implications for Offline Purchase and Mobile Commerce" (2016). ICIS 2016 Proceedings. 3.
https://aisel.aisnet.org/icis2016/ITImplementation/Presentations/3
The Adoption and Use of Mobile Application-Based Reward Systems: Implications for Offline Purchase and Mobile Commerce
Customer reward systems have rapidly shifted from plastic cards schemes to mobile application-based initiatives, yet our understanding of the economic value of mobile reward systems has not kept pace with this development. Using an individual-level transaction and reward redemption dataset from a large multi-brand, offline food-and-beverage merchandiser, we examine the effects of reward app adoption on customers’ offline purchase patterns and reward redemption behaviors by using a difference-in-difference method with propensity score matching. An intriguing empirical issue is whether consumers redeem their reward points more aggressively and spend more out of pocket after adopting reward apps. Our results lend support to this argument. App engagement, which is measured by the frequency at which reward apps are activated, is positively associated with increasing cash expenditure and number of points redeemed. Furthermore, our findings imply that past reward point redemption increases the level of goodwill stock, which affects future cash expenditure.