According to a new study, promotional games can help retailers increase consumer conversion rates and spending.
When consumers win discounts through games off chance, such as scratch-off tickets, they are more likely to buy products and spend more compared to customers offered standard discounts that apply to everyone.
Stefan J. Hock, UConn assistant professor of marketing and the lead author of the study in the Journal of Consumer Research, said: “Winning a discount affects perceptions of luck, which leads to positive store attitude, which, in turn, increases shoppers’ likelihood of making a purchase and their overall spending.”
The phenomenon was even observed by researchers when the discount from a promotional game is smaller than a traditional discount.
Hock and professors Rajesh Bagchi of Virginia Tech University and Thomas M. Anderson of the University of Colorado, used data from seven studies in 2017 and 2018 to compare won discounts with straight discounts in terms of consumer conversion rates and spending.
The researchers found that discounts received through promotional games always lead to an increased likelihood of purchase and overall spending – the increase ranged from 42% to 213%.
“What we’ve learned is that this type of promotion can be cost effective for the merchant if the ‘chance’ discount is the same or even less as what a retailer would offer for a straight discount,” said Hock.
“My word of caution, though, is that it should be used sporadically. If I ‘win’ a discount every time I shop, there’s no perception of luck or chance,” Hock added. “Since many brick-and-mortar stores are struggling, this may be a small piece of the puzzle that helps them generate higher sales.”
Journal Citation
Stefan J Hock, Rajesh Bagchi, Thomas M Anderson, Promotional Games Increase Consumer Conversion Rates and Spending, Journal of Consumer Research, Volume 47, Issue 1, June 2020, Pages 79–99, doi.org/10.1093/jcr/ucz043
