Consumers spend a lot of time waiting in lines, incurring economic costs due to lost time as well as psychological costs such as boredom, frustration, and anxiety. Naturally, lines are also costly for firms as they potentially result in lost sales and lower customer satisfaction.
Given that lines are bad for consumers and brands, why are they so prevalent? This is partly due to the fact that a large line of customers waiting out front is a universal signal of quality. For instance, when you walk by a restaurant with no one in it, are you as likely to go in, especially if you have never been there before? Most consumers would say no.
Beyond denoting quality, there may be another reason for firms to favor lines, despite their negative consequences.
In a recent research project, we examined the effect of waiting in line on customers’ subsequent purchase decisions. We asked whether the fact that one has waited for a long time in line changes the eventual purchase. For instance, imagine that you go to a popular cupcake store, which is always very busy and has a long line. After waiting for 45 minutes, you approach the cash register to place your order. Alternatively, imagine that when you go to a very popular restaurant you have to wait for an hour before your table opens up. Does the fact that you experienced a long wait influence the number of cupcakes you order or the amount of time you spend in the restaurant?
In a series of experiments conducted in the lab and on the field, we found strong evidence to support the hypothesis that the longer customers wait before making a consumption decision, the more they consume. For example, diners would want their dinner service to last longer if they had waited longer for the table; shoppers would buy more T-shirts after having a longer wait at a clothing store during sales; people would play more rounds of an arcade game if they had to wait longer for earlier customers to finish. This is driven by mental accounting; a larger purchase allows people to offset the fixed cost of the long wait. If they were to purchase only a small quantity after investing all that time in waiting, the long wait would not be worthwhile.
This has interesting implications for firms and consumers. Firms have been trying to improve customer waiting experience when they are unable to get rid of long waits (increasing capacity would obviously help but it is oftentimes not possible due to financial and space constraints). One feasible strategy is to distract customers’ attention away from the unpleasant wait by placing reading materials, TV screens or playing music in waiting areas. A second practice commonly employed at restaurants and casual eateries is providing customers with a menu to view while they wait. We found that such practices achieve their intended effect of reducing dissatisfaction due to long waits. However they also result in lower actual consumption, suggesting that “higher customer satisfaction” is not always the same as “higher revenue for the firm.” This is consistent with the mental accounting perspective; if the time spent waiting is distracted or occupied, it is perceived as a smaller cost to the customers. Thus the sunk-cost effect of waiting on the customers is dampened and the consumption amount decreases.
Therefore, our findings suggest that in certain contexts, a reasonably long wait before customers make a consumption decision can be beneficial for firms. This is especially the case when the correlation between purchase quantity and service time is low. In such settings, customers adjust the purchase quantity upwards in order to justify the amount of time they have waited in line, without displacing the other customers waiting to be served by the firm. The positive effect of lines on consumption may not be profitable in situations where the customers increase service time and displace other customers without generating additional revenues for the firm (e.g., fixed-price restaurants).
The magnitude of the decision bias identified in our research may vary across contexts. For example, it can depend on factors such as unit price (consumers who wait in line for the new iPhone will not purchase an additional phone due to a longer wait). There can be saturation effects; the incremental effect of a long wait may be insignificant for a consumer that already intends to purchase a large quantity (for instance, due to low price or very high quality).
What does all this mean for consumers when they are waiting in line? Next time you are in a long line, if you do not want to make a large purchase that you might later regret, we suggest that you distract your attention away from the time you spend waiting.
John Cui is an assistant professor of operations and information management at Georgetown’s McDonough School of Business, Chris Hydock is an assistant professor and the Research Director of the Georgetown Institute for Consumer Research and Sezer Ülkü is an associate professor of operations and information management at Georgetown’s McDonough School of Business.