ASA's Marketing section's online seminar talk is tomorrow. Below are the details. Looking forward to seeing you all.
Time & Date: 9pm-10pm EST, 25th February
Speaker: Daniel McCarthy
Title: The Impact of Subscription on Spending and Share-of-Wallet: Evidence from Restaurant Delivery.
(Joint work with Yeohong Yoon, Young-Hoon Park, and E. Shin Oblander).
Abstract: Subscription services are growing in popularity, yet their competitive implications are relatively understudied. This paper investigates the effects of a restaurant delivery company's subscription program on consumer spending within and across categories, and how these effects are moderated by spending at competing firms. Using individual-level transaction data over 17 months, we find that signing up significantly increases focal firm spending, with a persistent-yet-declining effect over time that is consistent with subscriber churn dynamics. This increase is driven by more orders within the restaurant delivery category and higher share-of-wallet to the focal firm. Multihomers (customers of both focal and competing firms before signing up) show a larger and more persistent increase in spending at the focal firm after signing up than singlehomers (customers of the focal firm alone before signing up), who exhibit a smaller and statistically insignificant lift after six months. Moreover, singlehomers increase their spending at competing firms after signing up, whereas multihomers decrease theirs. Signing up does not significantly affect spending in adjacent categories such as grocery deliveries and restaurant dine-in. These results suggest that a subscription service can positively impact not only the firm offering the subscription but also competing firms, but only when multihoming is low.
Speaker details: Daniel McCarthy is an Associate Professor of Marketing at the University of Maryland's Robert H. Smith School of Business. Dan popularized customer-based corporate valuation, a "bottom-up" approach to valuing firms by assessing the value of their customers. His other areas of research focus include data fusion, data privacy, missing data problems, machine learning, and causal inference.
------------------------------
Gourab Mukherjee
Associate Professor
University of Southern California
------------------------------