Came across an interesting article on Journal of Marketing Research by Hmurovic, Lamberton, and Goldsmith explores the impact of limited-time offers on online consumer behavior.
Read article here: https://journals.sagepub.com/doi/10.1177/00222437221118856
Key takeaways:
Limited-time offers (LTOs) are often used in physical stores, where they can be effective in driving sales. However, the study found that LTOs are less effective online, where consumers are more aware of the persuasive intent behind them.
The study found that consumers are more likely to be skeptical of LTOs online than in physical stores. This is because online consumers are more likely to compare prices and research products before making a purchase. They are also more likely to be aware of the fact that LTOs are often used to sell products that are not actually in high demand.
The study suggests that LTOs can be more effective online if they have a justification for the time limit that is outside of the retailer’s control. For example, an LTO that is tied to a holiday or a change of season is more likely to be effective than an LTO that is simply based on a made-up deadline.
The study also found that LTOs are more effective early in the purchase funnel, such as when a customer is first considering a product. This is because consumers are more likely to be impulsive and make a purchase without doing a lot of research when they are first considering a product.
In addition, the article also discusses a number of other interesting findings:
- LTOs are more effective for younger consumers and for consumers who are more price-sensitive.
- LTOs are more effective for products that are considered to be “luxuries” or “experiences.”
Overall, the study suggests that retailers need to rethink their approach to LTOs in the online environment. LTOs can still be an effective marketing tool, but they need to be used more strategically. Retailers should focus on creating LTOs that are relevant to their target audience and that have a justification for the time limit. They should also use LTOs early in the purchase funnel.