Effectiveness of monetary discounts: comparing quantity scarcity and time restriction

Abstract

Purpose This study aims to examine whether adding a quantity scarcity message to a monetary discount helps to improve consumers’ offer-related perceptions and intentions, and how the effectiveness of that message compares with adding time restriction to the offer. Design/methodology/approach Two experiments, where participants evaluated retail ads and responded to relevant measures, were conducted in two country markets. Findings Adding either a quantity scarcity message or time restriction to a monetary discount increases the potency of a retail offer. Further, when an offer ad emphasizes product and price-related cues in a balanced manner, time restriction results in more favorable consumer perceptions than scarcity. However, this difference in the messages’ efficacy disappears when the offer strongly emphasizes price-related cues. Research limitations/implications The US market sample is more homogeneous than the Indian one. Discounts were presented in terms of advertised reference prices; further research with other discount formats is desirable. Practical implications Understanding the relative efficacy of quantity scarcity message and time restriction in discounted retail offers can give managers flexibility in the use of these tools. Originality/value This paper addresses scholars’ call for theory-grounded research that provides guidance to retailers on the use of sales promotional tools.