Abstract

Online multi-sided markets or platforms are digital marketplaces that facilitate transactions between distinct groups, such as buyers and sellers. While sellers who join a platform may increase their customer base, they also risk losing their existing customers to competitors within the same platform. This research aims to investigate how sellers can attract new customers while retaining their existing ones using promotions on the platform. The study focuses on an online food ordering platform, where customers can search for local carry-out restaurants and place orders for home delivery. Participating restaurants can advertise or send promotions to platform users via push notifications to their smartphones. This study analyzes the effectiveness of these in-app promotions and their impact on future orders across three customer categories: loyal customers of a focal restaurant, loyal customers of competing restaurants, and switching customers.

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