Replication
Less of this one? I'll take it: New insights on the influence of shelf-based scarcity

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Abstract

Recently, Parker and Lehmann (2011) demonstrated shelf-based scarcity influences consumer preference. In addition to replicating their work across four studies, we extend their findings with evidence that shelf-based scarcity cues 1) impact consumer willingness-to-pay, 2) increase the likelihood of selecting an unfamiliar brand, and 3) influence actual product choice in a field study. Furthermore, we replicate the original study in a different research context that extends beyond packaged goods, with visible inventories that are only 25% different from one another, utilizing a different presentation format. Taken together, this research demonstrates that shelf-based scarcity is a robust heuristic that has far-reaching and stable effects on consumer purchase decisions.

Introduction

Consumers are often in purchase decision situations where they lack product experience, objective knowledge, or strong preferences. As such, they rely on extrinsic product cues, such as price, physical product features, and/or brand image, to infer product quality and popularity (Kirmani & Rao, 2000). While some cues, such as price, may be quite obvious, research indicates that additional, more subtle cues, such as retail shelf inventories, also serve as effective signals (Parker and Lehmann, 2011, van Herpen et al., 2009).

Retail shelf inventory levels are highly visual and easily observed by consumers. Importantly, observation is a favored method of acquiring information in asymmetric information conditions (Murray, 1991) and, in such conditions, consumers are known to make accurate judgments about visual cues (Roitman, Shadlen, Latham, & Pouget, 2008). Parker and Lehmann (2011) found consumers make inferences about shelf-based scarcity, equating it to both product popularity and quality, which subsequently improves choice probability. This work replicates their finding that shelf-based scarcity impacts choice, and provides further evidence of the robustness of the effect. Specifically, we extend the original work by demonstrating that shelf-based scarcity cues 1) impact consumer willingness-to-pay, 2) increase the likelihood of selecting an unfamiliar brand, and 3) influence actual product choice in a field study. We replicate Parker and Lehmann's (2011) study in a different research context that extends beyond packaged goods, with visible inventories that are only 25% different from one another (Parker & Lehmann, 2011 employed 50–57% differences), utilizing a different presentation format.

The following four studies accentuate and extend key findings from Parker and Lehmann's (2011) work on how a subtle and omnipresent cue, shelf-based scarcity, impacts choice.

Section snippets

Study 1: shelf-based scarcity & willingness-to-pay

The goal of this study is to extend Parker and Lehmann's (2011) work by assessing the extent to which shelf-based scarcity impacts a consumer's willingness to pay. Willingness-to-pay is used as a measure of the monetary value a consumer assigns a product, and as such, it is a central element of estimating demand and establishing appropriate prices (Wertenbroch & Skiera, 2002). Accordingly, as consumers make inferences about the popularity or value of a product, such inferences affect consumer

Study 2: shelf-based scarcity & price-tiers

Extant research shows consumer preference is heavily influenced by the alternatives in a given choice set (Simonson & Tversky, 1992). For example, in buying situations where a clearly superior alternative is not obvious, consumers demonstrate a preference for the mid-priced, compromise option as opposed to the extreme options (Simonson, 1989). The robustness of the compromise effect has been noted in a number of studies (e.g., Kivetz, Netzer, & Srinivasan, 2004). However, if shelf-based

Study 3: shelf-based scarcity & brand familiarity

Parker and Lehmann (2011) evaluated the impact of shelf-based scarcity on choice sets with familiar and unfamiliar brands independently. Study 3 replicates their finding that shelf-based scarcity has a positive impact on choice, while extending it to situations where the choice set contains both a familiar and unfamiliar brand. Similar to the use of compromise as a strategy to reduce the risk associated with choice, consumers utilize brand as a proxy for product value and as a means to

Study 4: testing scarcity in a field experiment

As called for by Parker and Lehmann (2011, p. 13), a follow-up field experiment was conducted to demonstrate the effects of shelf-based scarcity in an actual retail setting. The retail setting was a high-end beauty products store. The store's customers are predominately female, aged 18–70, with the majority in their late thirties to fifties. The average transaction amount is approximately $65. Two types of the same brand of imported French soaps (retail $2.75) in similar colors (off white and

Mediation analysis

To understand what might be driving our results, mediation testing was conducted to evaluate the extent to which the inferred actions of others mediate the relationship between shelf-based scarcity and choice. Protocol data were collected for all lab studies (1–3). Parker and Lehmann demonstrate, via a single-item 7-pt. scale (1 = very unpopular, 7 = very popular), popularity as the mechanism that accounts for the shelf-based scarcity effect. Our studies employed a three-item 7-point scale, based

Discussion & future research

Four studies clearly replicate Parker and Lehmann's (2011) work on shelf-based scarcity, and provide evidence, via extensions of their work, for the robustness of the effect. In addition, these studies address several of the limitations and directions for future research outlined in the original 2011 article. Combined with the original research, this work supports the assertion that shelf-based scarcity is an effective signal, with broad implications, that may circumvent other established

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