Social proof as a promotional persuasion tactic - A quantitative comparative study on the individual and joint effects of scarcity and urgency on consumer behaviour

Sammanfattning: With the emergence of e-commerce, the way consumers are shopping has changed drastically and the competition has increased. In order to stay profitable, retailers have to come up with more innovative and effective ways to attract and convert possible customers. Social proof has long been a utilized phenomenon by brick and mortar retailers, but it is becoming more and more necessary even for online stores to employ aggressive promotional tactics in order to persevere. Previous research has not examined different social proof promotional tactics in combination with each other, which has created a gap in the literature. This thesis therefore examines two promotional tactics, scarcity and urgency, and analyses and compares their individual and joint effects on consumer attitude and behaviour. Using a quantitative method to examine this phenomenon, collecting data through several surveys, the thesis came to several interesting conclusions. First, the thesis concludes that the effect of promotional tactics on consumer values is stronger on hedonic products than on utilitarian products. Second, implementing scarcity as a promotional tactic will increase attitude, popularity and attractiveness, an effect that is found to be mediated by perceived value. Third, the combination of quantity limits (scarcity) and time limits (urgency) increases consumer behaviour in terms of purchase intention and speed of conversion. The perceived value and attitude have a mediating effect on the intention to purchase the product. At last, the results show that there is a positive relationship between individuals defined as being value-shoppers, and their intention to purchase as well as the speed of conversion. In sum, scarcity and urgency have distinct benefits that e-commerce retailers should employ according to their goals.