We have all received e-mails or pop-up timers with so-called “exploding deals'' or time scarcity marketing promotions. Do you fall for the marketing tactic?
My guess is you don't, which would mean you are like most consumers out there.
A study done by Jillian Hmurovic, marketing professor at Drexel University, and Kelly Goldsmith, marketing professor at Vanderbilt University, showed time scarcity marketing tactics don’t work as well online as they do in the store.
The authors said it’s imperative for retailers to understand the need to use different tactics online vs. in store.
For decades Kmart’s “blue light special” worked well and eventually spread to other stores. An announcement would be made to customers that a “blue light special” was starting and a flashing blue light would flash above the product(s) that were now on special for a limited amount of time.
With online shopping becoming a must for most businesses, marketers have been taking this tactic online. However, it is not working the way they want it to.
Cait Lamberton, marketing professor at Wharton University explained due to a consumer's ability to be in charge online the time scarcity tactics tend not to work well. Consumers can easily search for better deals online whereas in person they would have to drive to other retailers to figure out if there is a better deal.
Another reason is that most consumers have a high amount of persuasion knowledge. They are able to see through the marketing gimmicks and realize that they are being strong-armed into making a purchase decision, something most consumers do not like.
For example, Humurovic and Goldsmith did what they called “The Pizza Experiment.” They gave some participants an online promotion of 30%, some had a clock with that, others did not and some received a birthday discount of 30%.
The participants who received the 30% off with a time li...