Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Monday, March 18, 2013

Online outlet shops

There are various internet shopping platforms out there nowadays targeting at different groups of customers (high end luxurious goods, cheap affordable fashion wear). Outlet sites like 'BrandAlley' aims to manipulate consumers' smart shopper feeling of finding a good deal (Shimp & Kavas, 1984). For example, when browsing through the list of items, consumers not only can choose to browse items by increasing price, they can also choose to view items by discount rate. Findings by Schindler (1989) supported that shoppers satisfaction increase according to the discount they can get.

 
Besides, 'BrandAlley' operates under a membership system, which is free. However, as internet users can only see its content after they registered membership, it inevidently creates a special feeling of exclusive discounts for its users. In particular, they also offer private pre-sale for members who liked their Facebook page. Baron & Roy (2010) found that exclusive deals are favoured over inclusive offers.

Another tactic to lure customers to spend more especially on online purchases is the free delivery offer when purchase was up to a certain limit. This tactic is useful under the explanation of loss aversion (Kahneman & Tversky,1979), especially when individuals tend to avoid losses of 'delivery cost' and decide to buy an extra item to meet the free delivery threshold. 

References:

Barone, M.J. & Roy, T. (2010). Does exclusivity always pay off? Exclusive price promotions and consumer response. Journal of Marketing, 75, 2, 121-132.

Kahneman, D. & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47, 263-291.

Schindler, R.M. (1988). The role of ego-expressive factors in the consumer's satisfaction with price. Journal of Consumer Satisfaction, Dissatisfaction, and Complaining behavior, 1, 34-39.

Shimp, T.A. & Kavas, A. (1984). The theory of reasoned action applied to coupon usage. Journal of Consumer research, 11, 795-809.

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