Last updated on July 20th, 2023
Thanks to a partnership with Kansas City, Kansas-based Associated Wholesale Grocers (AWG), graduate students at the University of Illinois’ Gies School of Business are researching the effectiveness of digital coupons on customer behavior.
The company shared a statement on LinkedIn, stating “the students’ findings are helping to guide [our] digital coupon strategy.”
Kate Favrow, director of marketing and brand development for AWG Brands and a Gies alum, said, “Our partnership truly helps both parties involved. By allowing the students to work with real anonymized data, they are exposed to the complexities surrounding the grocery industry and gain real-world experience before entering the workforce.
“On the flip side, we gain new perspectives and appreciate the insights and recommendations that come from their analysis work.”
Starting in January 2022, three cohorts of students seeking master’s degrees in data analytics were provided five years of digital coupon redemption data from AWG and recent transaction data from seven consenting AWG retailers.
The goal was to discover whether digital coupons and discounts are associated with a change in private brands purchasing behavior, in terms of more spending and/or customer retention.
This was the largest data set that any of the students had attempted to analyze. After months of data cleansing, goal setting and analysis, the findings showed a variety of ways in which digital coupons affect consumers’ behavior and exposed areas that need more analytical focus.
For instance, the redemption and transaction analysis concluded:
- Consumers who use digital coupons also have bigger basket sizes.
- Digital coupons affect customer retention on AWG Brands. This means that consumers who used a coupon on an item, were likely to buy that item again even without a coupon.
- Redemption data showed that digital coupon use peaked at the end of 2020 during the height of the COVID-19 pandemic; however, it is steady and grows at the end of each year during the holiday selling season.
“We sincerely appreciate AWG for their invaluable partnership, mentorship, and guidance, enabling our students to tackle real-world business challenges and develop vital problem-solving skills,” said Ashish Khandelwal, University of Illinois professor.
“Their commitment to experiential learning is commendable, shaping the business leaders of tomorrow.”
Additional insights from the students will tie into the future analysis of the AWG Brands digital coupon strategy. In addition, the seven retailers who shared their transaction data also received personalized findings reports.
“Exploring real data, formulating questions and employing the tools and techniques we learned in the classroom was truly enriching,” said Mukul Kaushik, one of the students. “We are grateful to AWG for providing us with this valuable opportunity.”
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