Spending points during crises: Adaptive behavior on E-loyalty programs

Abstract

This study investigates the impact of macro-level dynamics, such as the COVID-19 pandemic, on customer point-usage behavior in e-commerce, focusing on how global crises alter consumer spending and loyalty program engagement. Using big data from SPK, an F&B holding company, and employing binary logit and panel regression models, this study highlights significant shifts in post-pandemic customer behavior. The findings reveal that both customers with low and high usage levels decreased their spending, transaction frequency, and point accumulation. However, the former showed an increased propensity to use points for purchases, with heightened redemption rates and average points used per transaction, whereas the latter exhibited a decline in these areas. These results underscore the importance of understanding customer-specific responses to economic crises for designing effective loyalty program strategies in e-commerce, and offer valuable insights for the development of promotional strategies and theories in this domain.