Researchers ask: Is time-constrained promotion effective in sales?

Jing-Bo Shao, Fei-Si Yao, and Min Xie of the Harbin Institute of Technology in Harbin, China, have explored the concept of restrictive marketing, which encompasses both traditional online-to-offline businesses and emerging original design manufacturer (ODM) enterprises.

They have identified several factors that help to shape consumer behaviour when faced with various types of promotion – and whether those factors have a positive, negative or neutral effect on their decision to purchase a product. 

The factors include time constraints, price discounts, product price levels, and past online buying experience.

Fundamentally, when consumers are faced with limited time to take advantage of a promotion, they are more likely to make a purchase. 

Moderated by previous experiences of buying online

This is a key finding from the research. However, the effect is moderated by previous experiences of buying online. These are shoppers who are more experienced, perhaps more cynical, less gullible and less likely to be swayed by such marketing tactics.

The researchers also found that perceived value plays a significant role in moderating purchase intention when faced with time constraints. 

Ultimately, consumers tend to decide on value before making a purchase decision, rather than being triggered or nudged to make a summary decision foisted on them by a [perhaps artificial] time constraint. 

Of course, the degree of price discounting can counter this cynicism as it will boost the perceived value of a product, making it more appealing to consumers within the limited timeframe, the research team points out.

They say insights from this work should feed back to marketing departments keen to nudge consumers, as marketers must understand the experience of their presumed customers better in order to target them more effectively with such strategies. 

The researchers also point out that consumers themselves can often understand how such marketing works and how they are being targeted – and so seek out the best offers and discounts when they do wish to buy a particular product, but without being led too heavily by what they may perceive as ‘marketing tricks’.

You can find out more about the research, entitled ‘Is time-constrained promotion actually affective? The moderating role of price discounts and previous online consumption experience’ here.