Shopping on daily deal websites: how numbers of previous purchases make a difference in product purchase intentions
A recent phenomenon in retail marketing, ‘daily deal’ websites offer products for sale for a limited time and at heavily discounted rates. Given the relative newness of the daily deal websites, empirical studies are limited. A key distinction of ‘daily deal’ sites from other online vouchers and online auctions is that the numbers of items sold are displayed. The focus of this paper is to examine whether being told how many people have already purchased the item influences a shopper’s choice. In particular this research seeks to examine whether there was a bandwagon (those who wish to conform) or snob effect (those who do not wish to conform) when number of previous purchases were shown. Prior literature has shown the existence of bandwagon and snob effects in shopping situations. However, no study to date looks at these two concepts on a daily deal website, and no study in particular measures purchase intention based on these two concepts. This study seeks to fill this gap.
This study examines shoppers’ buying behaviour when exposed to a high, low or no number of previous purchases on a daily deal website, and whether this behaviour is different when the shopper is influenced by the snob or bandwagon effect. Using an experiment, shoppers were exposed to the same daily deal website, offering the same product, with only the number of purchases manipulated – high, low, or no information. A total of 219 students were randomly divided into three equal groups of 73 and assigned to one of the three treatments – high, low or no information on purchase numbers.
Results showed there to be no difference between snobs, bandwagoners, or even neutrals, when the prior purchase level was low, high, or not revealed. It is suspected that the urgency factor maybe an explanation. Further research would be useful to first see if these results are replicated with other products – particularly services. Second, it would be worthwhile introducing a measure of the urgency effect, and seeing if this indeed moderates the need for uniqueness effect.