See How Much We’ve Sold Already! Effects of Displaying Sales and Stock Level Information on Consumers’ Online Product Choices

Abstract

Many online retailers make sales and stock level information live available to customers on their websites and offline retailers also increasingly can display this information. Yet it is unclear how consumers perceive such information and how it influences consumer choice. High sales and low stock may both signal popularity and quality, which will stimulate further sales. We however argue that sales level is more diagnostic than stock level as a cue and hence the effect of sales level on consumer choice will be stronger than that of stock level. Also, when both cues are available, the effect of sales level is expected to dominate. In addition, brand familiarity is expected to moderate these effects. These hypotheses are tested in two scenario-based online experiments in which participants choose between competing products for which information about either sales levels, stock levels, or both sales and stock levels is displayed. Results support the hypotheses and also show that sales level is indeed a more diagnostic cue than stock level. Analyses further reveal how perceptions of the popularity and quality of a product mediate the effects of sales and stock levels on consumer choice. The findings imply that retailers can successfully use sales and stock level information to induce quality perceptions and influence consumer choices.