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Digital coupons can trigger shoppers to start spending again in times of recession

Digital coupons “generated positive and sustainable effects on the turnover and total sales of local catering and retail businesses, in particular. These positive effects were experienced by businesses of all sizes, but particularly large merchants. And they were not at the expense of spending in other categories.” 

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A number of service sectors were severely affected by the COVID-19 pandemic, including the catering, retail, tourism and entertainment industries. Globally, policy makers have introduced various initiatives to reinvigorate consumer spending. And, in China, digital shopping coupons have proved to be a popular measure for many local governments.

Unlike paper coupons and cash subsidies, these digital shopping coupons are dispensed through third-party digital payment platforms in China, such as Alipay, WeChat and Meituan. They typically work by offering a reduction when a certain final threshold is reached, e.g., $30 off a $90 purchase, and the idea is that they boost households’ willingness to consume, giving firms the confidence to continue trading and retain employees. The costs of the vouchers are shared between local governing bodies.

In a study published in the KeAi journal China Economic Quarterly International, researchers in China explored how effective these shopping coupons were in helping merchants survive the pandemic recession. The study authors Yong Wang and Zhentao Yin, researchers at the Institute of Finance & Banking, Chinese Academy of Social Sciences, and Jianwei Xing, an assistant professor at the School of National Development, Peking University, focused on the city of Shaoxing, a prefecture of China’s Zhejiang province with a population of 5 million.

The municipal government of Shaoxing, together with Alipay, released 180 million yuan worth of digital coupons to the public in six waves in 2020; 27.5 million yuan (500 yuan per citizen) was given to low-income groups, and 152.5 million yuan was provided in digital coupons covering the catering, lodging, shopping, fitness, book and information (cell phone) industries. All these coupons had to be used within Shaoxing, and each one was valid for seven days.

According to Wang, the digital coupons “generated positive and sustainable effects on the turnover and total sales of local catering and retail businesses, in particular. These positive effects were experienced by businesses of all sizes, but particularly large merchants. And they were not at the expense of spending in other categories.” 

The researchers found that the redemption rate of the Shaoxing coupons increased in each wave. Yin says: “It was only 38% for the first release, then it immediately rose to 60% during the second wave and eventually reached 70% in the sixth wave. After the first release of coupons on 3 April, the redemption rates of shopping and catering were the highest, 71% and 42%, respectively, followed by coupons for cell phones. Those for books, lodging and fitness had low redemption rates. By the last wave of coupons on 8 May, the redemption rates for shopping and catering had  rising to 90% and 81%, respectively, while cell phones jumped to 53%.”

The team conducted their study by reviewing mobile platform transactions. They examined high-frequency data, in other words, data that contain a very high number of observations, and they evaluated the effects of digital shopping coupons on catering and retail businesses specifically.

The purpose of their study was to gather data to help optimise the design of digital shopping coupons and determine the feasibility of adopting them as a normal fiscal policy tool. And they believe their findings provide empirical evidence that digital coupons are an effective policy tool for economic recovery. Xing adds: “The study also suggests that reasonable rules should be set to direct more consumers to redeem coupons at small and mid-sized merchants, for example, by lowering the minimum purchase requirement for redeeming coupons and issuing cross-merchant redeemable coupons.”

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Reversible words can lower consumer disbelief in ads

A simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim.

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It’s estimated that consumers experience hundreds if not thousands of marketing messages daily. While the exact number can depend, how much someone believes the message can be more important for marketing success than the number of messages they see. 

A new study reveals that a simple word choice in marketing messages can significantly impact how confident consumers feel about believing – or not believing – a claim. Researchers found that when words differ in their “reversability,” or how easily people can think of their opposites, it can trigger different mental processes when consumers evaluate marketing language. 

Imagine the messaging options for a new sunscreen designed specifically for those who like a strong scented product. The first product description reads, “The scent is prominent,” while the second notes, “The scent is intense.” The word “prominent” is uni-polar, meaning people tend to negate it by adding “not” to the original statement.

“Intense,” though, is a bi-polar word, meaning readers can easily come up with its opposite meaning and negate the statement by replacing it with its antonym. In this example, “The scent is mild,” instead of, “The scent is intense.” 

“When people encounter easily reversible words, like ‘intense’, in messages processed as negations (mild), they experience lower confidence in their judgements compared to words that are hard to reverse, like ‘prominent,’” explained Giulia Maimone, a postdoctoral scholar in marketing at the University of Florida Warrington College of Business. 

Across two experiments of more than 1,000 participants, the research demonstrated that this effect occurs because negations of bi-polar, or reversible, words engage a more elaborate cognitive process requiring additional mental effort, resulting in lower confidence of the statement’s truthfulness. 

Based on their findings, the researchers suggest that marketers take this advice when crafting language: for new products, use affirmative statements with easily reversible words, like ‘The scent is intense’ in the sunscreen example, which most consumers will judge as true with high confidence. Importantly, this language would also minimize the confidence of consumers who will be skeptical about the message, as they will process it via a more complex cognitive process that reduces confidence in those consumers’ disbelief. 

“This simple lexical choice could help companies maximize confidence in their desired messaging and minimize confidence among the doubters,” Maimone explained. 

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If you’re a perfectionist at work, your boss’ expectations may matter more than your own, research finds

Help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

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If you’re among the 93% of people who struggle with perfectionism at work, new research suggests that your experience may depend less on your own high standards and more on whether those standards meet your supervisor’s expectations. 

Researchers from the University of Florida Warrington College of Business found that whether perfectionism helps or harms employees depends largely on whether employees’ personal standards align with their supervisors’ expectations. 

Specifically, they looked at the connection between employees’ self-oriented perfectionism, or the expectations of flawlessness they set for themselves, and supervisors’ other-oriented perfectionism, which reflects the extent to which they set excessively high standards for and critically evaluate their employees’ performance. 

Using data from more than 350 employees and about 100 supervisors, the researchers found that perfectionism’s impact depends on whether employees’ standards align with what their supervisors expect and how clearly those expectations are understood. 

When employees’ personal standards are aligned with their supervisors’ expectations, they tend to experience less role ambiguity, meaning they have less uncertainty about the expectations and standards for their role, why those standards matter and the consequences of not meeting them. This clarity in their work is linked to better performance, lower burnout and higher job satisfaction. 

“Problems between employees and their supervisors are more likely to arise when these expectations don’t match,” explained Brian Swider, Beth Ayers McCague Family Professor.

The most difficult situation occurs, Swider and his colleagues found, is when supervisors expect higher levels of perfectionism than employees expect from themselves. In these cases, employees reported greater uncertainty about their roles, along with worse work outcomes including higher burnout and lower job satisfaction.

“If you’re an employee who struggles with perfectionism at work, our findings suggest that understanding your supervisor’s expectations may be just as important as managing your own tendencies towards perfectionism,” Swider said. “Talking to your supervisor about priorities, standards and how your performance will be evaluated can help reduce uncertainty and ensure you both share a clear understanding of what success looks like.”

The researchers have similar recommendations for employers: help your employees by clarifying expectations through regular feedback and performance conversations to reduce role ambiguity, as doing so can provide employees with a better understanding of role expectations and enhance mutual understanding of those standards.

The researchers also recommend that organizations should consider how employees and supervisors are paired, as mismatched expectations can increase stress, reduce job satisfaction and ultimately impact performance. 

The research, “The influence of employee-supervisor perfectionism (in)congruence on employees: a configurational approach,” is published in Organizational Behavior and Human Decision Processes

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Study shows scaling startups risk increasing gender gaps

Founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

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When startups scale quickly, founders often make hurried hiring decisions that unintentionally disadvantage women, according to new study from the Stockholm School of Economics in Sweden. The study shows how the pressures of rapid growth increase the likelihood that founders rely on mental shortcuts and make biased decisions. 

Drawing on large‑scale Swedish data, the study shows that scaling—when companies hire far more people than their usual growth trend would predict—puts pressure on founders to decide swiftly, which increases the use of mental shortcuts. These shortcuts can activate gender stereotypes, shaping who gets hired and who moves into managerial roles.  

“During those moments of rapid growth, even well‑intentioned leaders can fall back on familiar stereotypes when assessing who they believe is best suited for the role,” says Mohamed Genedy, co-author and Postdoctoral Fellow at the House of Innovation, Stockholm School of Economics. 

Reduced odds of hiring female managers 

His research analyzes more than 31,000 new ventures founded in Sweden between 2004 and 2018. It finds that in male‑led startups, scaling reduces the odds of hiring a woman by about 18 percent, and the odds of appointing a woman to a managerial position by 22 percent.  

These patterns emerge even in a highly gender‑equal national context, making the findings especially noteworthy.  

Crucially, the study reveals that founders with HR‑related education counteract these challenges. In ventures led by founders with HR training, the odds of hiring a woman increase by more than 30 percent, and the odds of appointing a woman to a managerial role increase by 14 percent for the same level of scaling.  

“When founders have experience with structured hiring practices, the gender gaps shrink, and in some cases even reverse,” Genedy says.  

“This shows that getting the basics of HR right early on really pays off. When things start moving fast, founders with HR knowledge are less likely to rely on biased instincts and more likely to hire from a broader talent pool.”  

Prior experience in companies with established HR practices also helps, though less so. It raises the likelihood of hiring women as the new ventures scale, but does not significantly affect managerial appointments. 

Differences persist in female-led ventures 

The study additionally shows that these patterns are not driven by founder gender alone. Even solo female‑led ventures display similar tendencies when scaling, though to a somewhat lesser degree.  

And in female‑dominated industries, scaling increases the hiring of women for regular roles but still reduces the likelihood that women are appointed into managerial positions.  

“When scaling accelerates, cognitive bias kicks in for everyone,” says Mohamed Genedy. “Female founders are not immune to these patterns.”  

Together, these results point to underlying cognitive mechanisms that shape decisions under time pressure.

The study, Scaling with Bias? The role of founders’ HR knowledge and experience in hiring and managerial appointments, was published in Human Resource Management.

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