Uncovering the multiple impacts of retail promotion on apparel store performance: A study based on shopper count data

This study extends the context of promotion research to the purchase of seasonal goods which warrants comparison shopping. This study covers several store performance measures that have not been used, and promotional activities that have not been investigated in previous studies. Using multiple performance measures, this research uncovers the attraction and conversion effects of retail promotion, and distinguishes different promotional activities with regard to these effects. Based on the analysis results, retailers can identify effective types of promotional activities and improve their assessment of store performance.;This study investigates the multiple impacts of retail promotion on apparel store performance based on electronically-tracked shopper count data. Store performance is measured by store entry ratio, closing ratio, average spending and store sales. Store entry ratio is the proportion of front traffic (people walking along a store front) entering a store. Closing ratio is the proportion of store traffic (people entering a store) making purchases at the store. Average spending is the average dollar sales per transaction.;This research acknowledges that consumers visit several stores before finalizing their purchase decision. Based on theories about consumer search behavior, this study hypothesizes that retail promotion can affect their search behavior and hence store performance. Two Canadian ladies-wear chains participated in this study. The study period was from October 1, 1996 to March 31, 1997. The data collected include transaction, traffic and staffing data, details about promotion, competition and weather.;Four research models are formulated using front traffic, store entry ratio, closing ratio and average spending as dependent variables respectively. The analysis results indicate that store entry ratio is related to promotion signage at the store front. Store front signage conveying to consumers large price savings or inventory clearance appears to be particularly effective in attracting shoppers to enter a store. Markdown activities are found to increase closing ratio but to decrease average spending. Newspaper advertising seems to increase both store entry and closing ratios, especially on the few days following an advertisement and for advertisements involving multiple product categories. Several extensions of this study, including an experimental design, are also proposed.