Price discount strategies in times of increasing price transparency: How price consciousness and price comparison moderate the effect of discount strategy on store price image

Abstract

This research uses a large set of price promotion field data to better understand the application of price discount strategies by Swiss grocery retailers. Taking the prevalence of these strategies in the Swiss grocery retail market as a basis, we use an online experiment that builds on recent developments in technology usage by consumers and investigate the impact of price comparison on store price image. The results show that Swiss grocery retailers have increased their number of discounts offered over the observation period of two years. In addition, store price image significantly improved with the number of discounted products offered. On the other hand, discount depth had no influence on store price image. These effects, however, are dependent on consumers’ price consciousness and their (non-) usage of a price comparison tool. Lastly, theoretical and practical implications are being provided.