Examining the Efficacy of Time Scarcity Marketing Promotions in Online Retail

Abstract

Time scarcity promotions (e.g., “40% off for a limited time”) are mainstays of retail marketing. But might translating them to online shopping contexts alter or nullify their efficacy? The authors first report a meta-analysis of published and unpublished research as well as a simulated shopping experiment suggesting that the positive effects of time scarcity promotions observed offline may not emerge in online shopping contexts. They then posit that this difference arises because, in the online context, time scarcity promotions activate persuasion knowledge, which in turn changes their effects. In support of this, the authors demonstrate that when retailer-exogeneous justifications are given for online time scarcity promotions (e.g., consumers’ birthdays, seasonal changes), persuasion knowledge activation is decreased, improving time scarcity promotions’ effects on consumer interest. Further, when an exogenous justification is combined with less, as opposed to more, time until an online promotion’s expiration, significant positive effects on consumer engagement may be observed. However, effects stop short of suggesting that time scarcity promotions will consistently yield superior outcomes compared to identical control promotions online. Therefore, the authors highlight the continued need for careful managerial use as well as further research related to the optimal translation of offline tactics to online retail.

The Effects of Content Ephemerality on Information Processing

“…However, whether this is the case is far from a foregone conclusion; previous research on the effects of a related restriction (i.e., limitation of the time people have to process stimuli) has produced mixed results: whereas some work has found that people cope with time pressure by allocating additional cognitive resources and adopting more efficient processing strategies (Donkin, Little, and Houpt 2014; Payne, Bettman, and Johnson 1993; Pieters and Warlop 1999), other studies have suggested that it might interrupt processing (De Dreu 2003; Svenson and Maule 1993) by adding emotional, psychological, and physiological stress-related costs to already cognitively demanding tasks (Eysenck et al 2007; Margittai et al 2016; Sanbonmatsu and Kardes 1988). Similarly, although some research has shown that limiting the time consumers have to make a purchase (i.e., an “exploding offer”) increases sales (Aggarwal and Vaidyanathan 2003), other work has argued that such tactics can backfire (Hmurovic, Goldsmith, and Lamberton 2016) or simply have no observable effect (Hmurovic, Lamberton, and Goldsmith 2022).…”

The Uptrend Effect: Encouraging Healthy Behaviors Through Greater Inferred Normativity

“…We used Facebook Ads Manager's split-testing function (Orazi and Johnston 2020) to test the effectiveness of different ad messages. Facebook advertising is commonly used by organizations to promote health behaviors (e.g., vaccinations; Hunt et al 2022) and is increasingly used by academic marketing researchers (e.g., D’Angelo and Valsesia 2022; Hmurovic, Lamberton, and Goldsmith 2022). Following these researchers, we use click-through rate (CTR; total number of clicks divided by total number of impressions) as our dependent variable.…”

On the role of scarcity in marketing: Identifying research opportunities across the 5Ps

“…Scarcity promotions (e.g., limited-time, limited-quantity) have been shown to be powerful drivers of purchase behavior (see Hmurovic, et al, 2023 for review). However, the shopping contexts in which scarcity promotions are used have evolved since most of the seminal work on such promotions was conducted.…”

“…However, the shopping contexts in which scarcity promotions are used have evolved since most of the seminal work on such promotions was conducted. For instance, recent work has shown that time scarcity promotions (e.g., countdown timers) have become much less effective online (vs. offline; Hmurovic, et al, 2023 ), partly due to their proliferation in online shopping environments, which has made consumers wearier of them in that context. In a similar vein, the product shortages and quantity restrictions experienced throughout the COVID-19 pandemic may have impacted how consumers now respond to limited-quantity promotions.…”