The behavioral responses to perceived scarcity – the case of fast fashion

The literature on scarcity has generally examined consumers’ attitudes towards scarce products and suggested that scarcity messages have a positive effect on the evaluation of and attitude toward the scarce object. However, literature has largely failed to explain consumers’ feelings or reactions to human-controlled scarce environments. This study examines how deliberate product scarcity influences the consumers’ behavioral responses, and provides an understanding of consumers’ reactions to conditions of scarcity that are strategically created by marketers. The context of this study is fast fashion retailers, as they are known to create extreme human-induced scarcity. We conducted 21 face-to-face interviews with fast fashion store managers, consumers, and an industry expert. Further, observational research was also conducted to observe the consumer buying behavior across 10 different fast fashion stores. The objectives were to (1) help the interviewees think about the various strategies adopted to induce scarcity within the stores (from retailer’s perspective), (2) understanding of scarcity in these stores (from consumer’s perspective), and (3) consumers’ responses to such deliberate manipulations. All the interviewees agreed that fast fashion stores were successful in creating perceived scarcity which reflected both limited merchandise supply as well as deliberate manipulation of merchandise availability by the retailer. The findings also suggest that consumers in these perceived scarcity conditions exhibit buying behavior like urgency to buy, which further leads to deviant and competitive behaviors like in-store hoarding and in-store hiding. Though perceived scarcity, urgency to buy, and in-store hoarding was consistent across the interviews with store managers and consumers, surprisingly, the phenomenon of in-store hiding behavior did not emerge from any of the interviews conducted with store managers, but was a consistent theme across most consumer interviews.     

‘Should I Buy,Hoard, or Hide?’- Consumers’ responses to perceived scarcity

Scarce shopping situations often seem to have a greater value for consumers and trigger extreme behaviors. This study examines the effects of scarcity that is strategically created by the marketer in influencing consumer behavior. Drawing from reactance theory, it is suggested that, when scarcity is perceived to be strategically created by the retailer, consumers tend to exhibit deviant and competitive behaviors. The mediating role of emotions like anticipated regret is also examined. Further, the role of human traits like competitiveness and hedonic motivations in moderating the relationships between perceived scarcity and behaviors is also examined. The results of the study suggest that, under the conditions of perceived scarcity, consumers tend to exhibit behaviors like in-store hoarding, and in-store hiding, due in part to the increased urgency to buy. Also, the findings suggest a pertinent role of emotions and human traits in influencing the decision making under the condition of strategically-created scarcity.     

Motives and barriers affecting consumers’ co-creation in the physical store

ABSTRACT

The rise of e-commerce has caused a dramatic shift in consumer behaviour, putting pressure on physical stores to offer a more personalised and service-oriented offering. This paper investigates one strategy retailers might apply in this context: in-store consumer co-creation. Research has predominantly focused on online-based consumer co-creation in new product and service development. We argue that with increased focus on digitalisation and consumer experiences in physical retail, this type of co-creation will increasingly take place in-store. Following a pre-study with practitioners, our main study uses 20 scenario-based semi-structured interviews, where we identify eight consumer motives and seven barriers that underlie consumers’ willingness and reluctance to create and select new products in-store, respectively. Some motives, such as ethical, self-efficacy, and concerted are reported as barriers when reverted, due to consumers’ concerns regarding data privacy, low levels of perceived self-efficacy and assumptions that the technology might be flawed. Other motives largely overlap existing research on motives for co-creation whereas other barriers predominantly pertain to the underlying technology and the physical setting of co-creation in-store. The findings further indicate that consumers co-create differently online versus in-store. In-store seems particularly suitable for more marketing related aspects of co-creation, with a stronger emphasis on playfulness and purchase intentions. Practical implications for retailers are therefore discussed.     

The Perfect Fit: The Moderating Role of Selling Cues on Hedonic and Utilitarian Product Types

With the need among retailers to create effective promotional campaigns, scarcity, and popularity cues are increasingly used. Drawing from regulatory focus and popularity versus scarcity cues literature, this research explores the impact of popularity versus scarcity cues and product types on consumer perceptions of risk, product uniqueness, and purchase intentions. Results from three studies provide primary insights: (1) A utilitarian product aligns with prevention goals and hence the popularity cue will enhance consumers’ purchase intentions, and (2) a hedonic product aligns with promotion goals and hence the scarcity cue will enhance consumers’ purchase intentions. Further, we theorize that perceived risk and perceived product uniqueness will act as psychological mechanisms. We discuss theoretical contributions and strategic insights for retailers and marketers that the findings indicate.     

In-store quality (in)congruency as a driver of perceived legitimacy and shopping behavior

This research builds on the institutional theory literature to investigate the impact of retailer’s in-store quality (in)congruency on consumer shopping behavior. Specifically, considering the consensual view of legitimacy as a variable of main interest to explain organizational survival, this research focuses on legitimacy as the mediating variable explaining the effects of in-store quality (in)congruency on shopping behavior. Results from a scenario-based experiment show that in-store quality (in)congruency affects legitimacy such that when merchandise quality is low, a high store environment quality leads to lower legitimacy. Also, the results show that legitimacy acts as a mediator that induces a decrease in shopping behavior. By highlighting perceived legitimacy as the underlying mechanism explaining the effect of in-store quality incongruency on consumer behavior, this research offer new insights for retailers.     

Consumer shopping value: An investigation of shopping trip value,in-store shopping value and retail format

Although delivering value is the key for retailers to create new competitive advantages, the literature on consumer shopping value is fragmented and findings are inconsistent. This study aimed to understand consumer shopping value in-depth by examining consumer shopping processes and experiences in two retail formats: mass merchandisers and department stores. This study conceptualizes consumer shopping value as having two components: shopping trip value and in-store shopping value. Shopping trip value is originated by fulfillment of general shopping motivations, and in-store shopping value stems from retail elements that create in-store shopping experiences that consumers have in specific retail contexts. Five shopping trip value dimensions and six in-store shopping value dimensions are identified from the in-depth interviews. The findings highlight how consumer shopping value is a complex and context specific construct.     

Which Products are More Responsive to In-Store Displays: Utilitarian or Hedonic?

In-store displays aim to boost sales of both utilitarian and hedonic products. Noting typical differences in the information processing and purchase behavior evoked by these product types, and building on congruency theory principles, the authors propose that different types of in-store displays (i.e., island, end-of-aisle, or shelf signage) are more appropriate for utilitarian versus hedonic products, and the use of price or product promotions might reinforce these effects. With a database that combines three data sources (scanner, observational, and survey), this article presents an analysis of a market share model at the SKU level. The results confirm that in-store displays have differential effects on sales, depending on their characteristics; congruency between the decision-making process of utilitarian versus hedonic products and the characteristics of in-store display types moderates their effectiveness in terms of SKU sales. Shelf signage strongly increases the sales of utilitarian products, whereas island and end-of-aisle displays increase sales of hedonic product categories more effectively. The use of congruent promotions creates synergistic influences that reinforce these effects. In particular, price promotions improve the impact of shelf signage on utilitarian products, and product promotions strengthen the impacts of island and end-of-aisle displays on hedonic products. These results extend prior research on in-store marketing actions and the nature of utilitarian versus hedonic products, as well as providing recommendations for retailers and manufacturers seeking to optimize their retail space and commercial budgets.     

Effects of perceived interactivity of augmented reality on consumer responses: A mental imagery perspective

As the use of technological features is becoming more common in digital retailing, retailers have adopted augmented reality (AR) solutions to help consumers browse their products. This study examines dimensions of perceived interactivity after experiencing shopping with AR and investigates the relationships between perceived interactivity and mental imagery and between mental imagery and other consumer responses in a mobile shopping context. A total of 302 female online consumers in South Korea participated in a survey. After shopping cosmetic products with the AR function in a mobile app, participants completed the questionnaire. The findings reveal that the controllability and playfulness dimensions of perceived interactivity influence mental imagery, which, in turn, affects consumers' attitudes toward a product and their behavioral intentions. The relationship between perceived interactivity and mental imagery differs based on an individual's involvement level. These results provide practical insights for digital retailers in creating effective mobile shopping environments.     

The strategic drivers of drop-shipping and retail store sales for seasonal products

Retailers that sell seasonal products face significant challenges when planning inventory assortment. The incorporation of drop-shipping into their operations, wherein suppliers own and ship products directly to consumers at retailers’ requests, has only complicated these challenges. This study investigates multichannel assortment planning of retailers that sell seasonal products. We first capture structural properties of multichannel retailing of seasonal products through a simple and parsimonious analytical model. The analytical model uncovers key seasonal product attributes that make it more attractive for retailers to allocate a product for sale in the drop-shipping channel than in the store channel. We then empirically assess the findings of the analytical model. Using a rich and unique dataset from the fashion retail industry, we test relationships between product attributes and retailers’ channel choice. The application of a generalized linear latent and mixed model controls for selection bias by jointly estimating retailers’ likelihood of allocating a product’s inventory to the drop-shipping channel and the allocated volume in each channel according to the product’s characteristics. The empirical findings suggest that retailers are less likely to drop-ship products that are colored, irregularly sized, and offered in more style variants. They also unveil cross-channel effects in terms of inventory amounts allocated for sale in each channel according to those characteristics. Our analytical and empirical assessments jointly demonstrate the complementary roles played by drop-shipping and store channels for seasonal products and offer important academic and practical implications.     

Revisiting the showrooming effect on online and offline retailers: The strategic role of in-store service

This study revisits the showrooming effect on online and offline retailers and is the first to examine the strategic role of in-store service in this regard. Considering the effect of in-store service in attracting consumers to offline channels and the showrooming effect of persuading offline consumers to purchase online, we propose a model consisting of two firms, a brick-and-mortar (BM) store and an e-tailer that can invest the staff or facilities necessary to deliver in-store services to consumers. Based on the service decisions, the two firms make their pricing decisions. We compare the optimal decisions of retailers in the cases without and with showrooming to explore the interaction between in-store service and showrooming. Our findings indicate that when a customer bears a high travel cost to visit the BM store, the store should lower the price, and improving the in-store service is ineffective in countering the consumer's showrooming behavior. Moreover, the service level in the case with showrooming can be either higher or lower than in the case without, and the outcome mainly depends on the efficiency of the service investment. Interestingly, in-store services can lead to a win–win situation for both online and offline retailers with showrooming. This study can also be extended to the case of powerful e-tailers or competing BM stores.     

Don't miss the boat when consumers are in-store! Exploring the use of point-of-purchase displays to promote green and non-green products

This paper presents two empirical studies that investigate various combinations of different products and types of Point-of-Purchase displays (PoPs) from self-regulation and operant conditioning theoretical perspectives. The results reveal that PoPs’ effectiveness depends on the congruence between, on the one hand, the type and the content of the PoP and, on the other hand, the perceived product attributes. After discussing how to engage consumers with product-related signals that help perceive an adequate control over the in-store purchasing experience, the paper contributes to the literature by offering theoretical and managerial implications on designing effective green products display strategies.     

Implementation of technology and relationships to supply chain performance: apparel manufacturers' perspectives

Apparel manufacturers operate within a distribution channel with suppliers, retailers and consumers. In a competitive market, apparel manufacturers, in transactions with retailers, must make changes. These changes have potential to affect the supply chain and consequently to add or reduce value of products for the retailer. This study investigated changes in products and services associated with implementation of new technologies. A two-stage design used both a qualitative study and a quantitative study. The qualitative study with 10 industry personnel was used to develop the change variable. The quantitative study had US apparel manufacturers (n = 105) respond to a mailed survey about changes their firms had experienced. Findings indicated that implementation of Quick Response (QR) technologies when moderated by the demographics of fashion level, seasonality, and price point of the product did correspond with changes in product offerings and customer services.     

Appreciating Anonymity: An Exploration of Embarrassing Products and the Power of Blending In

While most research suggests using ostentatious packaging as a strategy to increase sales, using such packaging for embarrassing products can actually decrease purchase intentions. Five studies explore two components of packaging that influence product anonymity and the relationship between anonymity, embarrassment, and purchase intentions. The studies use a variety of methods including one field study, three scenario-based experiments, and one virtual reality video study with a behavioral component. This research contributes to retailing literature by examining the effect of packaging dimensions on product anonymity and the subsequent impact on embarrassment and purchase intentions. We consistently show more anonymously packaged products are perceived as less embarrassing and are more likely to be purchased than less anonymously packaged products. Consumers are able to circumvent undesirable stigmas associated with embarrassing products by selecting products that are more anonymously packaged and positioned in the store. Additionally, increased sales due to product packaging differences are more likely when an embarrassing product is positioned in an aisle versus on an endcap. Promotional incentives, such as coupons, in-store discounts, or bonus buys, can mitigate the negative effect of embarrassment onto purchase intentions. These findings have important implications to our understanding of shopper behavior when threatened with embarrassment.     

The moderating effects of in-store marketing on the relationships between shopping motivations and loyalty intentions

This study attempts to understand the moderating roles of in-store marketing by incorporating the effects of shopping motivations on repatronage and word-of-mouth intentions in the context of fashion apparel by applying theories related to self-determination and social impact. Structural equation modeling using data collected from young adult fashion apparel shoppers in Thailand reveals positive effects of shopping motivations. The utilitarian shopping motivation shows a greater effect in predicting loyalty intentions than hedonistic shopping motivation. In-store marketing is shown to have a moderating effect on loyalty intentions, although the influence of each moderator on the investigated direct effects varies. The findings can prove helpful to fashion apparel retailers in developing effective advertising and promotional strategies that correspond to the specific needs of the shoppers to promote store loyalty intentions.     

The Catch-22 of Responsible Luxury: Effects of Luxury Product Characteristics on Consumers’ Perception of Fit with Corporate Social Responsibility

The notion of “responsible luxury” may appear as a contradiction in terms. This article investigates the influence of two defining characteristics of luxury products—scarcity and ephemerality—on consumers’ perception of the fit between luxury and corporate social responsibility (CSR), as well as how this perceived fit affects consumers’ attitudes toward luxury products. A field experiment reveals that ephemerality moderates the positive impact of scarcity on consumers’ perception of fit between luxury and CSR. When luxury products are enduring (e.g., jewelry), a scarce product is perceived as more socially responsible than a more widely available one and provokes positive attitudes. However, this effect does not appear for ephemeral luxury products (e.g., clothing). The perceived fit between luxury and CSR mediates the combined effects of scarcity and ephemerality on consumers’ attitudes toward luxury products. This study provides valuable insights that luxury brand managers can use to design their CSR and marketing strategies.     

Do Promotions Increase Store Expenditures? A Descriptive Study of Household Shopping Behavior

An important question for retailers is whether promotions induce households to increase their in-store expenditures or merely reallocate a predetermined shopping budget. Should expenditures be fixed, retailers might decrease their profitability when running promotions by displacing expenditures from high margin to lower margin products. Using household level store receipts and an extended AIDS model, we provide evidence that while household expenditures do increase with promotions, there is also a significant reallocation of expenditures among the different categories. This implies that retailers have to choose carefully which products are promoted, if promotions are to increase profits.     

Generation Y vs. Baby Boomers: Shopping behavior,buyer involvement and implications for retailing

This paper presents some significant empirical findings about generational cohorts and their shopping behavior. Marketing has long relied on the use of market segmentation. While birth age has been a useful way to create groups, it describes segments but does not help to understand segment motivations. However, environmental events experienced during one's coming of age create values that remain relatively unchanged throughout one's life. Such values provide a common bond for those in that age group, or generational cohort. Segmenting by ‘coming of age’ age provides a richer segmentation approach than birth age. This study compares two significant cohorts: Baby Boomers and Generation Y, with respect to their shopping behavior and purchase involvement for food, clothing and automobiles. For the three types of products, Baby Boomers value the retail experience and in-store service higher than Generation Y. For Baby Boomers, the purchase process starts with a retailer the consumer trusts, who gives advice for choosing the right product, while for Generation Y, the purchase process starts with choosing a product. This study presents implications for retail strategies that have an appeal to different generational cohorts and considers how retailers should deal with building customer relationships.     

Inclusive or exclusive? Investigating how retail technology can reduce old consumers’ barriers to shopping

This paper investigates older consumers in-store shopping experiences and the barriers that they face. The aim is to understand how new retail technologies (e.g., interactive in-store displays, self-service tills, robots etc.) can help seniors access satisfying, autonomous retail experiences, helping them to achieve a sense of inclusion in physical retail settings. Drawing upon the social inclusion/exclusion theory and information overload theory, the research employs a qualitative approach based on an inductive design, including face-to-face semi structured interviews with 36 consumers aged 75+. The findings highlight (i) old consumers have scarce interactions with in-store technologies (adding knowledge to motivations literature), (ii) the need to develop new technologies to support these consumers, and (iii) the extent to which these technologies are excluding rather than including old consumers (adding knowledge to the drivers of the field of exclusion). Results provide guidelines for retailers to enhance the sense of inclusion for old consumers through a better usage of new technologies.     

Scarcity tactics in marketing: A meta-analysis of product scarcity effects on consumer purchase intentions

Scarcity tactics are an essential tool for marketers. Cues that signal the current or potential unavailability of a product generally enhance its value and desirability and in turn increase purchase intentions. While there have been earlier reviews, the fragmented nature of the research to date means there is no cohesion across findings. Given that retailers employ a variety of scarcity cues in a diversity of settings, it is important to identify the magnitude of the effect of scarcity cues and how the effect on consumers’ purchase intentions changes across conditions. This research presents a meta-analysis of 416 effect sizes from 131 studies. Results show that demand-based scarcity is most effective for utilitarian products, supply-based scarcity for experiences, and time-based scarcity for high involvement products. The results show that managers need to consider the above factors to maximize the success of scarcity tactics in their marketing campaigns.     

Creating and consuming experiences in retail store environments: Comparing retailer and consumer perspectives

This article investigates the substance of arguments about an experience-oriented economy and experience-seeking consumption in retailing. Employing a case study research approach (n=7) and the Critical Incident Technique (n=252), we show how retailers as well as consumers relate to in-store experiences. The results point out that retailers’ use ever more advanced techniques in order to create compelling in-store experiences to their consumers. In contrast, the depiction given by consumers reveals that their in-store experiences to a large extent are constituted by traditional values such as the behavior of the personnel, a satisfactory selection of products and a layout that facilitates the store visit.