An empirical analysis of the extreme cherry picking behavior of consumers in the frequently purchased goods market

Debabrata Talukdar, Dinesh K. Gauri, Dhruv Grewal

Research output: Contribution to journalArticle

38 Scopus citations

Abstract

Extreme cherry pickers are customers who seek price deals and excessively avail themselves of deep discount offers, which generates negative profits for retailers. This study uses market transaction and primary consumer survey data to provide insights into the determinants, prevalence, and profit impacts of such behavior in the frequently purchased goods market. We find that the extreme cherry picking segment is small (about 2% of all shoppers), but its relative value varies across stores, and consumers manifest this behavior only in secondary stores. An inverse U-shaped relationship marks consumers' opportunity costs for cross-store price search and likelihood of extreme cherry picking behavior. Finally, we also find that a loss leader promotional strategy adds to retailers' bottom lines, despite the pure loss generated by extreme cherry pickers.

Original languageEnglish (US)
Pages (from-to)336-354
Number of pages19
JournalJournal of Retailing
Volume86
Issue number4
DOIs
StatePublished - Dec 2010

Keywords

  • Loss leader promotions
  • Price search
  • Profit impact
  • Shopping trip incidence models

ASJC Scopus subject areas

  • Marketing

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