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Hidden price promotions: Could retailer price promotions backfire?

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  • Li, Wenjing
  • Hardesty, David M.
  • Craig, Adam W.
  • Song, Lei

Abstract

Hidden-price promotions, a type of uncertain price promotion in which the final price is not revealed when consumers first encounter the product, have been recently adopted by retailers. However, current research suggests that hidden-price promotions have the potential to backfire and result in reduced consumer purchase intention. Across seven studies, we reveal that hidden-price promotions can be effective but risk increasing discount expectations, as consumers expect a large discount. Only when the discount level meets or exceeds inflated expectations does the excitement built by the promotion positively impact purchase intention. For cognitive purchases, even without providing a high discount, hidden-price promotions are as effective as traditional ones. This research provides guidelines for retailers that want to employ hidden-price promotions.

Suggested Citation

  • Li, Wenjing & Hardesty, David M. & Craig, Adam W. & Song, Lei, 2022. "Hidden price promotions: Could retailer price promotions backfire?," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:joreco:v:64:y:2022:i:c:s0969698921003635
    DOI: 10.1016/j.jretconser.2021.102797
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    Cited by:

    1. Wang, Siqi & Lim, Xin-Jean & Luo, Xi & Cheah, Jun-Hwa, 2024. "To hesitate or not to hesitate: Can popularity cues minimize the hesitation to checkout in e-commerce?," Journal of Retailing and Consumer Services, Elsevier, vol. 78(C).
    2. Aleksandra Kovacheva & Hristina Nikolova, 2024. "Uncertainty marketing tactics: An overview and a unifying framework," Journal of the Academy of Marketing Science, Springer, vol. 52(1), pages 1-22, January.

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