The Study for the Spillover Effects of Price Promotions: Focus on the Time Pressure and the Regular Price

Purpose: This study investigates whether the effect of price promotions on consumer purchases extends the promoted product itself, positively influencing adjacent products displayed. It empirically examines whether contextual factors such as time pressure and regular price moderate this spillover effect, driven by consumers’ reward-seeking behavior activated in promotional retail contexts.Research design, data, and methodology: This study used actual sales data collected from Amazon's time-limited promotional section, "Lightning Deals," where various products. The panel dataset included product-level variables such as sales claimed ratio, remaining promotion time, regular price, discount ratio, and customer reviews. A generalized linear model (GLM) with category-level random effects was used to empirically analyze the presence of promotional spillover effects.Results: The empirical analysis of Amazon's sales data revealed that the average discount intensity of adjacent products alone did not generate a significant spillover effect (H1 rejected). However, significant positive spillover effects emerged when the time remaining until the end of a promotional offer was longer (H2 supported), and when the regular price of the adjacent product was higher (H3 supported). This suggests that rather than responding automatically to price promotion cues, consumers are more likely to extend their purchase to other products under specific conditions.Implications: This study extends prior research beyond its traditional focus on the promotional effects limited solely to discounted products, by empirically explaining the spillover effects across randomly displayed product categories. From a managerial perspective, actionable implications for strategies for the product display arrangement, assortment, and recommendation for consumers in retail platform.