Modeling Interpurchase-Timing Using Competing Risk Model Incorporating Dynamic Frailty: Application to Consumers' Purchase Behavior on Multi-Channel

Abstract

In marketing, interpurchase-timing models have been studied to analyze consumers' purchase timings using survival analysis. In this study, we propose a competing risk model considering dynamic frailty and apply it to the purchase behaviors on multi-channels. We consider interpurchase-timings in both EC sites and real stores using a competing risk model. Furthermore, in the competing risk model for interpurchase-timing, we propose a model that captures dynamic changes of unobserved heterogeneity using a state space model and consumers' heterogeneity using a hierarchical Bayesian model. In addition, we construct a joint model that simultaneously deals with purchase amounts in addition to interpurchase-timings. The proposed model is applied to single-source data recording purchase behavior in both EC sites and real stores. The results show that the proposed model performs better than models that deal with only a single channel or models that do not consider dynamic changes of consumers' heterogeneity. Furthermore, differences in the effects of marketing variables between channels were also revealed, indicating the usefulness of the proposed model.