THE ROLE OF IN-STORE SLACK AND MENTAL BUDGETS IN SHOPPER MARKETING

My dissertation examines the impact of in-store slack on shoppers spending. In my first essay, I propose that consumers mental budgets for grocery trips are typically comprised of both an itemized portion and in-store slack. I conceptualize the itemized portion as the amount that the consumer has allocated to spend on items planned to the brand or product level and the in-store slack as the portion of the mental budget that is not assigned to be spent on any particular product but remains available for in-store decisions. Using a secondary data set and a field study, I find incidence of in-store slack. Moreover, I find support for my framework predicting that the relationship between in-store slack and budget deviation (the amount by which actual spending deviates from the mental trip budget) depends on factors related to desire and willpower.Building on my first essay, my second essay examines how the impact of promotions depends on whether the shopper still has in-store slack remaining in her mental budget. Specifically, I evaluate how the effect of promotional savings for both planned and unplanned items on spending varies as a function of whether the item is purchased before or after the shoppers in-store slack is depleted. Additionally, I examine how these relationships vary depending on income. To achieve these goals, I conducted a field study in which respondents used a hand held scanner to record the order of purchases. The results suggest that savings on planned items lead to stockpiling by higher income shoppers when the savings occur before the in-store slack has been depleted, but lead to increased purchase of unplanned items when they occur after in-store slack is depleted. I also show that promotions on unplanned grocery items do generate incremental spending at the basket level which increases with income, but only when the item is purchased after the in-store slack is exceeded. I conclude my dissertation with a discussion of future research opportunities within the field of shopper marketing.