Singapore, 2 March 2020 – A National University of Singapore (NUS) Business School study has shown that exposure to price promotions can cause impatience in another unrelated setting. This is because price promotions trigger one to seek rewards, and reward seeking leads to impatience.
The study was co-authored by Professor Leonard Lee from NUS Business School and Assistant Professor Franklin Shaddy from Anderson School of Management at the University of California, Los Angeles (UCLA) in the United States.
The findings, which have implications for how retailers want to position their price promotions, were published in the Journal of Marketing Research (print) in January 2020.
Methodology
The study analysed the responses of over 1,700 participants who were divided into two groups. One group was exposed to price promotions while the other was the control group. In a series of smaller experiments, including online and field studies, the researchers examined participants’ willingness to wait and actual wait times in different scenarios.
Findings
Participants who were exposed to price promotions indicated their willingness to pay a higher amount to avoid waiting for a bus, compared to those in the control group. In another study where participants had to wait for a video to load, those exposed to price promotions tended to press the “skip” button sooner.
The group exposed to price promotions also had a greater tendency to break rules in order to save time, such as using a self-checkout lane intended only for other shoppers with fewer items. Through questionnaires that tested participants’ sensitivity to rewards, researchers found that the impatience effect is more pronounced in people who are more responsive to incentives.
In a field experiment at a food court, participants who were exposed to a mock credit card promotion spent less time ordering and purchasing food, when compared to the control group.
Prof Lee said, “Price promotions have become commonplace, and it’s interesting to see how exposure to price promotions in one setting can cause one to feel impatient in a separate setting. In addition, consumers need not seize the promotion opportunity; just the exposure alone can make them impatient.”
Asst Prof Shaddy shared how managers can use the findings to increase or decrease customers’ impatience. He said, “Previous research has shown that impatience causes consumers to make impromptu purchases. So, managers might want to offer price promotions in settings where they want to encourage unplanned spending, such as in checkout lines or near purchase buttons on retail websites. Of course, the opposite would be true in situations where consumers are already impatient.”
Asst Prof Shaddy added, “We came up with this idea when discussing all the hysteria that accompanies Black Friday in the United States every year. This is the day after the Thanksgiving holiday, which traditionally signals the start of the holiday shopping season. It’s the one day of the year when we are most inundated with sales promotions, and it also happens to be the one day of the year when we see the most impatience out of consumers. People wait in frustratingly long lines, stores are packed, and customers even get into fights with each other. We thought the association might be more than coincidental.”
Prof Lee added, “While consumers may view price promotions as a way to save money, they should also be aware of the impatience effect that promotions can cause. This impatience may also cause them to lose out on a better deal later. In this case, the deal itself becomes more than what the consumers bargain for.”
For media enquiries, please contact:
ANG Hui Min Manager, Corporate Communications NUS Business School National University of Singapore DID: +65 6601 5857 Email: huimin19@nus.edu.sg
About National University of Singapore (NUS)
The National University of Singapore (NUS) is Singapore’s flagship university, which offers a global approach to education, research and entrepreneurship, with a focus on Asian perspectives and expertise. We have 17 faculties across three campuses in Singapore, as well as 12 NUS Overseas Colleges across the world. Close to 40,000 students from 100 countries enrich our vibrant and diverse campus community.
Our multidisciplinary and real-world approach to education, research and entrepreneurship enables us to work closely with industry, governments and academia to address crucial and complex issues relevant to Asia and the world. Researchers in our faculties, 29 university-level research institutes, research centres of excellence and corporate labs focus on themes that include energy, environmental and urban sustainability; treatment and prevention of diseases common among Asians; active ageing; advanced materials; as well as risk management and resilience of financial systems. Our latest research focus is on the use of data science, operations research and cybersecurity to support Singapore’s Smart Nation initiative.
For more information on NUS, please visit www.nus.edu.sg.
About NUS Business School
The National University of Singapore (NUS) Business School is known for providing management thought leadership from an Asian perspective, enabling its students and corporate partners to leverage global knowledge and Asian insights.
The school has consistently received top rankings in the Asia-Pacific region by independent publications and agencies, such as The Financial Times, Economist Intelligence Unit, and QS Top MBA, in recognition of the quality of its programmes, faculty research and graduates.
The school is accredited by AACSB International (Association to Advance Collegiate Schools of Business) and EQUIS (European Quality Improvement System), endorsements that the school has met the highest standards for business education. The school is also a member of the GMA (Graduate Management Admission) Council, Executive MBA Council, Partnership in Management (PIM) and CEMS (Community of European Management Schools).
For more information, please visit bschool.nus.edu.sg, or go to the Think Business portal, which showcases the School’s research.
