Laura Orcutt ‘Only 2 Left in Stock! Order Now!’ But Does That Really Work?

‘Only 2 Left in Stock! Order Now!’ But Does That Really Work?

When online retailers alert consumers they are low on stock, it can push people to buy right away. But only under certain conditions

By Christopher S. Tang

Posted on March 27, 2020 4:07 pm ET - https://www.wsj.com/articles/only-2-left-in-stock-order-now-but-does-that-really-work-11585339621?mod=searchresults&page=2&pos=3

Due to the social distancing guidelines, more than ever, people are buying online, and I have always wondered whether the larger, green font, “only # left” was 1) really true and 2) how much it affected my impulse shopping. This author is a UCLA professor who worked with a team from Arizona State University to research and they discovered that is does actually work to prompt more shoppers to purchase but only with “time-sensitive and perishable products such as hotel rooms or plane tickets, as well as unique items like collectibles or limited editions”, which makes sense. What struck me as odd was that for durable goods such as home-improvement products or kitchenware, it works opposite but for quite different reasons. I assumed it was simply because people could still shop around with the extra time, but what they found was that the consumer might think “the product is being pushed because it is undesirable, lower quality, obsolete or discontinued”. Moreover, “And in the case of items typically bought in larger quantities, such as partyware, lightbulbs and batteries, we found that scarcity messages can actually hurt sales by making shoppers believe they won’t be able to buy as much of a product as they want”. The article then goes on to highlight three things the seller should do to use this to their advantage, 1) highlight quality, 2) create a sense of urgency and 3) offer a bundle.

Apart from being very relevant to our current society, I thought this was a good example of what we learned in Ch. 13 to ‘Be ready for customers who initiate communication” and it also speaks to ethical issues. For example, the article’s final thought is that the seller should of course, never lie, because if a seller can’t afford to lose trust with a customer. Also, interestingly, even if it is true, if used too often, the shoppers can get tired of seeing them and the credibility of the scarcity messages can suffer.  And finally, it reiterates what we just learned in chapter 15 that effective sales promotion activities can influence decisions at point of purchase.