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When Shelf-based Scarcity Impacts Consumer Preferences

Jeffrey Parker, 2011
Faculty Advisor: Don Lehmann
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Abstract

Scarcity has long been known to impact consumers' choices. Yet, the impact of shelf-based scarcity in retail environments, created by stocking level depletion, has received almost no attention in the literature. Indeed, little research to date has even examined if consumers will attend to shelf-based scarcity in retail environments, much less how this cue can impact choice. A priori, given the inherently noisy and cue-filled nature of retail environments, it is quite reasonable to expect that shelf-based scarcity would play little to no role in consumers' choices. However, across six chapters, this dissertation demonstrates that shelf-based scarcity can impact consumers' choices and identifies the mechanism underlying these effects.

To begin, Chapter 1 introduces the research question, while Chapter 2 outlines the relevant extant literature and develops the hypotheses to be tested. Chapter 3 demonstrates not only that shelf-based scarcity can impact choices, but also that it does so through the inferences that it induces (i.e., the process through which shelf-based scarcity impacts choice is an inferential one). Chapter 4 examines moderators of the effect, demonstrating that shelf-based scarcity effects are reversed when popular products are considered undesirable. Further, Chapter 4 shows that (i) the shelf locations of the available alternatives and (ii) the consumer's concern about persuasion attempts can impact the inferences that consumers make regarding shelf-based scarcity, thereby attenuating its impact on choice.

Next, Chapter 5 focuses its attention on the robustness of shelf-based scarcity effects, showing that shelf-based scarcity impacts choices when (i) the choice is made either for oneself or for others, (ii) sales ranking, objective quality, or brand name information is available, and (iii) the choices being made are real. Chapter 5 also demonstrates two boundary conditions under which shelf-based scarcity effects are attenuated or overwhelmed. Specifically, shelf-based scarcity does not impact choices either when the consumer has prior strong preferences or when a price promotion is available in the category of interest. Finally, Chapter 6 closes this dissertation with a summary of the findings as well as a discussion of the implications of this work, its limitations, and potentially fruitful directions for future research.

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