Article info
International journal of Research in Marketing, Volume 35, September 2018, Pages 490-508.
On consumer choice patterns and the net impact of feature promotions
Authors: Jonne Guyt, Els Gijsbrechts
https://doi.org/10.1016/j.ijresmar.2018.05.002
In a time when consumers are more budget-conscious than ever, retailers and manufacturers continue to pour billions into feature promotions—those weekly flyer ads, circulars, and digital banners showcasing “hot deals.” Although these strategies have been longstanding pillars of consumer packaged goods (CPG) marketing, research by Jonne Guyt and Els Gijsbrechts challenges their effectiveness, especially in today’s high-inflation, price-sensitive environment.
Originally published in 2018 in the International Journal of Research in Marketing, the study sheds light on the true dynamics behind promotional lifts. But far from being outdated, its insights have become more relevant than ever in 2025, as shoppers increasingly favor retailer brands and private labels, and national brands struggle to maintain loyalty.
Two Consumer Worlds: Brand-Focused vs. Store-Focused
At the heart of the study lies a key discovery: not all consumers respond to promotions the same way. Guyt and Gijsbrechts identify two distinct shopper profiles:
- Brand-Focused Shoppers: These consumers are loyal to specific brands and are willing to switch stores to find their favorites on promotion.
- Store-Focused Shoppers: These consumers are loyal to a specific retailer and more likely to switch between brands within that store, choosing the best available deal at their preferred location.
Using a novel modeling approach—which they named the “Mixed-pattern Random-effects Nested Logit” (MRNL) model—the authors analyze household purchasing behavior across 16 CPG categories in the Netherlands over four years. Their findings reveal that most categories have a near-even split between brand-focused and store-focused shoppers.
The implications are significant: how consumers substitute between brands and stores determines whether promotions actually drive new sales—or just shift them around.
The Hidden Cost of Promotions: Cannibalization
A central message of the study is that promotions often fail to create incremental value. Instead, they result in cannibalization—consumers either buying the same product at a different store (hurting manufacturers) or choosing a different brand at the same store (hurting retailers).
According to the findings:
- On average, 23% of promotional sales come at the expense of the same brand in other stores—a hit to manufacturers.
- Another almost 26% of the lift comes from cannibalizing other brands in the same store—impacting retailers.
This means that a significant portion of promotional “gains” are not new sales at all. For manufacturers especially, promotions can become a subsidy for existing buyers, rather than a tool to attract new customers or increase volume.
Why It Matters Even More in 2025
Fast-forward to today, and these risks have intensified.
With global inflation driving up prices across food, household goods, and personal care, consumers are more price-sensitive and deal-focused than ever. Store loyalty has increased, but brand loyalty has declined. The result? A surge in private label (retailer brand) share—at the expense of national brands.
Guyt and Gijsbrechts predicted this shift. Even in 2018, they observed that:
- Store-focused consumers are less inclined to shop around and more likely to buy whatever’s on promotion in their usual store.
- This behavior makes them prime targets for private labels, which are almost always cheaper than national brands.
In the current climate, private labels have grown not only in share but in perceived quality, blurring the lines between value and premium. For retailers, this is a big advantage: they can promote their own brands, increase margins, and keep shoppers loyal to their stores.
For national brand manufacturers, however, this trend increases the risks outlined in the study. When highly advertised promotions drive consumers to a store where they end up buying a cheaper private label instead, the manufacturer loses both the sale and the promotional spend.
Price Consciousness and Promotion Fatigue
Another striking connection between the study and 2025 trends lies in consumer psychology. The researchers include survey-based metrics on price consciousness and price comparison habits—traits that now define the modern shopper.
Consumers increasingly rely on apps, loyalty programs, and digital flyers to hunt for deals. But this hyper-awareness can backfire on brands: shoppers often become trained to wait for deals, eroding everyday pricing power. This effect was already visible in the pre-inflation era, but in today’s cost-of-living crisis, it’s even more pronounced.
As the authors note:
“Whether feature advertising investments are money well spent depends on how consumers switch between available brands and stores.”
—Guyt & Gijsbrechts
In 2025, the answer is clearer than ever: it depends more than ever on the consumer’s underlying mindset and the category dynamics.
Not All Promotions Are Created Equal
The study also finds that the effectiveness of promotions varies sharply across product categories:
- Categories with high brand loyalty and quality differentiation (e.g., coffee, laundry detergent) tend to attract more brand-focused consumers, who are responsive to flyer promotions but often shift purchases across stores, cannibalizing manufacturer sales.
- In more commoditized or frequently purchased categories (e.g., custard, kitchen tissue), store-focused patterns dominate. In these cases, promotions mainly lead to brand switching within a store, with private labels often winning.
Further, the depth of the discount—how much a price is cut—doesn’t always correlate with success. In many cases, simply featuring a brand in a flyer (even without a price drop) can drive response. This finding suggests that visibility still matters—but who benefits depends on the context.
Strategic Implications: Smarter Targeting Required
For decision-makers, the lesson is clear: promotions without targeting are a blunt instrument in a high-stakes game. The study encourages both retailers and manufacturers to refine their strategies:
- Retailers should put more effort on store-focused shoppers by promoting private labels and tailoring flyers to reinforce store loyalty.
- Manufacturers must be far more selective. One-size-fit-all promotions can hurt more than help if they primarily attract deal-seekers or shift purchases across channels. Instead, manufacturers should focus on:
- Categories where brand-focused behaviour still dominates.
- Data-driven targeting to isolate responsive (and profitable) households.
- Avoiding subsidization of habitual buyers who would have purchased anyway.
The MRNL model developed in this study offers a powerful framework to analyze and segment customers by these patterns, paving the way for personalized and predictive promotion strategies.
Final Word: From 2018 Insight to 2025 Urgency
While the study was published seven years ago, its foresight is striking. It anticipated a consumer environment increasingly defined by store loyalty, brand indifference, price obsession, and private label growth—all accelerated by today’s economic conditions.
The takeaway for businesses? Stop assuming promotions always add value. Start digging deeper into who is responding and how. The future of profitable marketing depends not on how loud you shout your deals—but on how wisely you whisper them to the right shopper.