What Makes Consumers More Strategic? Evidence from an Experimental Study

In a business environment full of dynamic pricing schemes and complex marketing strategies, modern customers get more strategic with their purchase decisions. Ignoring strategic consumer behavior can seriously damage a firm’s business performance. Previous studies have proposed some countermeasures to alleviate the negative impacts of strategic consumer behavior. In this study, a scenario-based experimental study is conducted to identify possible factors which will impact customers’ strategic waiting. Our experimental results show that the higher the price of the product, the more likely the customers will postpone their purchase and wait for price cut. In addition, high discount rate encourages customers to wait for the anticipated future discounts, while late discount impedes them to do so. In addition, we find that the information display strategy plays a completely different role when product price is different. Specifically, displaying only one impede customers’ strategic waiting when product price is low, while it actually encourages customers’ strategic waiting when product price is high, which is typically not desired by retailers.