Photo: @lira_n4 via Twenty20
Do urgency tactics used by online retailers amount to marketing deception?
“Only 2 left at this price!”
“Popular item!”
“80 people are looking at this right now!”
These messages were offered as examples of tactics retailers are using online that may be contributing to impulse buying or unplanned purchases, according to a study from the University of Michigan School of Information.
An analysis of 200 of the top major online retailers found retail websites contained an average of 19 features that can encourage impulse buying.
Many of those features appear fairly innocuous, such as offering discounts, product ratings and interactive displays that allow users to, for example, zoom or spin product photography.
As opposed to typical marketing tactics employed at the store level, however, online retailers can take advantage of access to real-time information, such as the number of people who have already purchased an item, the exact number of products in stock or how many customers also have the product in their shopping carts.
“Some of this information can be helpful for consumers, but it can also encourage impulsive purchasing of products that in the end might not be worth it to the consumer or, in some cases, might even be regretted,” said Carol Moser, the study’s lead author and a doctoral student at the U-M School of Information, in a statement.
Of the 200 retail websites, 96 percent contained “social influence” features, which recommended products based on what “other people” bought; 69 percent used limited-time discounts with countdown clocks and other tactics that fed the buyer’s sense of urgency; and 67 percent made the product seem scarce with low stock warnings or “exclusive” product offerings.
One particular challenge for consumers is that they don’t know whether messages about an item’s popularity or availability is true.
In the study, the researchers wrote that some technology interventions may be able to support consumers by promoting more deliberative and less regretted choices. However, such interventions are hard to do without the cooperation of retailers and greater transparency, ethical practices and even regulation “may be necessary for supporting consumer rights.”
Discussion Questions
DISCUSSION QUESTIONS: Do you think online retailers are using questionable tactics to create a sense of urgency around purchases? What do you see as the biggest offenses?
Poll
BrainTrust
Charles Dimov
Vice President of Marketing, OrderDynamics
Laura Davis
Founder, Branded Ground
Nope. The first rule of marketing (or maybe 10th) is to create a call to action. You mean this is not okay but saying “we have a few iPads at $50 for our thanksgiving door busters” is?
It’s just business.
No. The examples given above are exactly what retail marketers should be doing. As long as the retailer is not misleading shoppers, or blatantly lying, then the idea of showing limited inventory visibility, stating that there are only 1 or 2 left, or informing of the other shoppers looking at items … all legit.
Does this encourage impulsive behavior and shopping? Perhaps. If the market in general is doing this and you are not, who is likely to be the loser in this scenario?
The biggest offense would be the falsifying numbers, or making incorrect statements to persuade customers to buy. No doubt that is unethical and in many cases, maybe illegal. That is a line NO retailer should cross. Remember — once one customer finds out and posts it online, your brand reputation will be at risk. And, remember that in a hypercompetitive market, that brand reputation means revenue and profitability.
To be honest, there is no way of knowing whether scarcity flags are genuine or a tactic by retailers to drive purchasing. If it is a tactic then it is arguably not very honest. However, given that the ultimate decision or whether to buy still lies with the consumer, I am not sure it matters all that much. Moreover, in most cases, consumers can return items they don’t want so there is an added layer of protection from that.
Creating a sense of urgency or missed opportunity has been going on for decades in direct to consumer, primarily on TV shopping ads. As long as the statements are true regarding quantities left or what other people are saying, then it is not deceptive. The best way to instill confidence with consumers about ratings and reviews would be to use a third party tool to get reviews, such as Trust Pilot. These systems cannot be manipulated by the seller.
Where I see deception is with the ticking clock on sites for deals. Many sites use this popup with a discount and the ticking clock “offer expires in 10 minutes.” But this same popup comes up every time you visit the site. When I see that type of behavior, I am hesitant to shop.
Do we think retailers are creating a sense of urgency around purchases — sure they are — we’d be shocked if they weren’t. Is this questionable? Really? Haven’t we been doing this forever? My local Persian carpet store up the block has been going out of business for the 27 years we’ve lived here. I’m all for consumer protection from fraud, but they are on their own when it comes to marketing.
Since when have we ever believed marketing tactics? From the Madmen days till now, we all know they’re full of it for the most part. That’s why some of Supreme’s (and others) tactics today are so refreshing: “you have to be stupid to buy this.” At least they’re honest.
“Deceptive practices” would be telling someone that the drugs they’re asking them to take every day aren’t addictive. That’s deception that should stop. Telling me that driving this pick up will make a man out of me is more like, “if you believe this, you’ll believe anything,” ie; the choice is yours.
Gamification is alive and real, and it works. It’s up to us consumers to be smart about taking bait or being taken….
I don’t think it’s a deceptive practice. Encouraging impulse purchases online is tougher than on the sales floor where shoppers can see and touch the products. Why wouldn’t online retailers want to create a sense of urgency with these messages? Several actually, because those messages are easy to tune out.
It will be interesting to see if anyone in this series of posts thinks there is something wrong with creating a sense of urgency. It’s called marketing or promotion or advertising. And by the way, the article does not mention that consumers can return what they regret purchasing. There is an off ramp!
Certainly, marketing likes to push the envelope and tapping into the ever advancing understanding of human psychology must be done with some caution … but that being said, I can’t recall ever reading a product review that said “I only bought this because 10 other people were looking at it and now I realize that a suboptimal decision. I’ve been bamboozled!” So fair game, unless the tactics are legitimately using fake information.
It’s par for the course. What about the department store chain that has a “One Day Sale” every day?
No. Everyone in business markets their products to sell. Look at car dealers on television. Shopping shows with limited quantities or countdown clocks. It’s everywhere. It’s business. Most have agreeable return policies to negate bad purchases. Beyond all this, the consumer is always responsible to make decisions for themselves. Smart consumers, who investigate items either on the internet or in-store, are rarely fooled.
“Popular item.” Yeah, there’s the kind of language we need to worry about. I usually don’t criticize research — especially when I don’t have the time to give it thorough study. But I really have to question the value of a study whose purpose seems to be to show that companies do things to encourage buying of their products; not unlawful, or even misleading things, just what we call “salesmanship.”
So yes, by all means let’s take action against false advertising, but let people fight the good battle against the 72pt font and endless exclamation marks on their own.
I see a spectrum of options here ranging from highly useful and totally legitimate (2 left at this price) to complete and utter blather. (Why is it still called a “one day sale”? Because it still works? Then that’s why.)
I receive the daily blast emails from over a dozen retailers and brands. Most so-called urgency is anything but. Is there anything urgent about the Gap announcing 40% off? NO … absolutely not. If Lululemon whispered 40% off, that would be urgent. “Limited time…” means nothing. It won’t be long before the next “limited time…” message shows up. “Only 12 hours remaining…” might have meant something the first time, but that message is now typically soon followed by “Sale extended!”
Urgency is in the eyes of the beholder. Strong brands can whisper and create urgency. Weak brands can scream and holler and create nothing but yawns.