Using Supermarket Loyalty Card Data to Analyse the Impact of Promotions

Abstract

The aim of this paper is to show how supermarket loyalty card data from a panel of over 1.4 million shoppers can be used to analyse the effect of price promotions in a way which can bring significant advantages to retailers and manufacturers when making promotional decisions. The paper demonstrates the significant advantages that loyalty card data can bring to enhance our understanding of promotions, compared to traditional scanner and panel datasets. Regression analysis is used to compare the effects of different promotional mechanics upon different tiers of product across the fresh beef category in Tesco, using both scanner data and loyalty card data. The results show that using loyalty card data, which enables us to moderate for specific shopper characteristics, produces more statistically significant results and provides a more detailed picture of how promotions influence sales.