Exploring time scarcity tactics in different shopping experiences
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.
Consumer study on effectiveness of the time scarcity marketing tactic
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 limit were less likely to buy. It actually triggered a lot of suspicion. Below are three of the things customers were wondering when they answered the open-ended question.
- Is the quality of the pizza good?
- Are they trying to push pizza because the ingredients are going to expire?
- Did they order too much dough?
“Customers do think about why this is happening, and that doesn’t always work in favor of the retailer,” Lamberton said.
Marketing tactics for the different experiences of online and in-store shopping
“People buy online but they shop in-store,” said Steven Silverstein, CEO, Spencer Spirit.
This quote is a perfect depiction of the fact that in-store experiences are very difficult to replicate online. So why do we market the same for two different experiences?
Clearly tactics that were used for brick-and-mortar shops are not working as well online, as shown by the consumer study done by Humurovic and Goldsmith. Part of this, according to Lamberton, is due to everyone measuring success online the same way.
Everyone is using the same performance measurements to see how well they are doing online. Clicks rule the online world, however they make everything look very similar.
“You can become nearly commodified by chasing the same metrics everyone is chasing online,” Lamberton said.
Marketing research and true omnichannel retail
Max Zalewski, director with the PRS IN VIVO Innovation Team, wrote that there has been a shift from keeping in-person and online shopping separate to true omnichannel retail, and that researchers are just beginning to understand it.
“There is a genuine need for reliable metrics that reflect the differences as well as the similarities in how consumers will behave in online and physical retail,” said Zalewski. “This comes down to understanding the context relative to the pack, as well as the impact of images that often stand in for the pack in e-commerce.”
For now, Humurovic and Goldsmith gave some recommendations for time scarcity marketing online.
- Justification: Justify the time scarcity promotions with a reason that a realtor cannot control. For example, a promotion that ends Christmas day or a birthday discount but only for a customer's birthday.
- Shorter is better than longer: Using a shorter time scarcity promotion will increase your chances of increasing sales. Plus it will lower the advertising cost.
- Less is more: Don’t rely too heavily on time scarcity promotions. The more you use this tactic the less likely you are to be increasing your sales.