Online group buying behavior: A study of experiential versus material purchases

Abstract

More than 50 million consumers participate in online group buying, hence its importance to retailers cannot be ignored. Four studies are conducted to determine (a) whether customers' preferences to participate in group buying relative to buying alone are more in the case of experiential (vs. material) purchases; (b) underlying psychological mechanisms affecting an individual's willingness to invite additional buyers; and (c) the moderating role of analytic versus holistic thinking orientation within the mediational framework. Consistent with expectations, preferences to invite additional buyers to receive a further discount (vs. buying alone and taking the deal-of-the-day) were greater for experiential purchases than material purchases. Three psychological motivators, namely social relatedness, conversational value, and anticipatory enjoyment, act as parallel mediators. Finally, moderated-mediation analysis shows holistic thinking accentuates the mediational pathway of anticipatory enjoyment but not for social relatedness, whereas analytical thinking accentuates the mediational pathway of conversational value. Of practical relevance to those designing group buying websites is that offering an additional discount to buyers if they are willing to expend the effort to form a larger group not only reduced the number of individuals indicating that they would not make a purchase at all, but about a quarter of respondents indicated that they would endeavor to find additional buyers. In addition, there is a clear preference for experiential goods; and for material goods, the findings suggest drawing attention to the experiences that material goods offer.

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