Use It Or Lose It: Time-Limited Promotions And Purchase Behavior

Abstract

While researchers have examined the impact of retail promotions on purchase acceleration in the past, the distinction between time-limited and time independent promotions has not been made in this context. Thus, for example, Neslin et al (1985) found that coupons have no significant impact on purchase acceleration. In this paper, we argue that promotions of short durations (time-limited) such as store coupons will accelerate purchases whereas promotions of longer durations (time independent) such as manufacturer's coupons will have no such impact. We test this hypothesis for two categories of consumer goods using scanner panel data. In a separate study, we also examine the impact of semantic cues indicating the time-limited nature of promotions (such as "10 Hours Only Sale") on purchase willingness, intent to search further for deals and attitude towards the deal.