Cross-categorical study on the impact of COVID-19 on consumer responses to price promotion

This study examines changes in consumer responses to price promotions during the COVID-19 pandemic. We measure the effect of two promotional tools (discounts and double reward points) on sales before and after the pandemic outbreak, while accounting for the heterogeneity in behavioral changes across five product categories. We use weekly sales data collected by a large online marketplace from January 2019 to December 2020. The results reveal that consumer responses to price promotions increased for all five product categories during the pandemic. However, the impact is more pronounced for food, hygiene, and privately consumed products than for durable and hedonic products. Finally, the timing of the structural break varies across categories, and the change in double-reward-point promotions exceeds that in discount promotions.