The Bimodal Effect of Product Ratings in Flash Deal

Flash deals in online retail are getting popular around the world. As the e-commerce landscape continues to expand, understanding how consumers make purchase decisions is crucial for online retailers to enhance their strategy and optimize sales. Previous studies found that product rating and price promotions increase sales where time and quantity limitations help consumers make quick decisions. Contrary to traditional online deals, flash deals consumers are pressured to decide by time and quantity, leading them to evaluate the product's perceived value by analyzing observational data. This study aims to explain the mechanisms through which product rating affects consumer purchasing decisions in terms of flash deals. When consumers have limited time and quantity, they are more likely to depend on readily available information to evaluate a product. To explore the relationship between product rating, and consumer purchasing decisions in flash deals, this study collects data from Amazon Lighting Deal, where the deals are available for only a limited time, in limited quantity. It also reveals the amount of products sold in real-time. To empirically analyze the consumer purchasing decisions this study collected observational data (i.e., product rating, price promotion, regular price, total reviews, and product sold). A sample of 5000 products was used to test the mediation model using the bootstrapping technique. The results of the mediation analysis revealed no significant direct impact on product rating and consumer purchase decisions. Our analysis also found an indirect negative relationship between product rating and purchase decisions through price promotions. The results unleashed the importance of price promotion strategies during flash-deal promotions. Our findings suggests that products with higher ratings tend to receive lower price promotion rates, negatively impacting consumer purchase decisions. Our study has practical implications for sellers and marketers to optimize their sales strategies during online flash deals. When sellers offer flash deals, they should consider balancing price promotions with the perceived quality conveyed by product rating.