Get it Before it’s Gone: Understanding Scarcity Perceptions in Fashion: An Abstract

Abstract

Retailers in the fashion industry are constantly employing new strategies in attempts to increase demand and revenue. The premise of such strategies often involves the use of scarcity perceptions which can take the form of various restrictions set by a firm in terms of purchase limits, purchase conditions, time limits, and product limits (Inman et al. 1997). Although numerous positive benefits may result from scarcity purchases, this study reveals a potential dark side to how marketers can use consumers’ perceptions of scarcity to capitalize on consumer buying behaviors. Such practices are labeled as “manufactured scarcity,” and combines both types of true scarcity (demand and supply) in an attempt to influence the “psychology of scarcity.” This term was identified by Kizilbash and Smart (1975) and refers to “the changing behavioral patterns of firms and individuals as a result of actual or perceived shortages (p. 64).” This is believed to potentially induce a state of panic or impulse buying. To understand the impact of such scarcity practices, two fundamental human needs are also investigated in this study: Need for uniqueness and need for belonging. Uniqueness theory states that people are motivated to maintain a level “specialness” relative to others in order to define their own self-related evaluations, thus will possess a greater desire for more scarce products perceived due to limited supply. An individual’s need to belong is one a core social motives used to establish strong and stable relationships with others. If an individuals’ sense of belonging is high, they may have a greater desire to purchase products when scarcity is perceived due to demand. A two-part study is being conducted to investigate this scarcity practice. For part one of the study, participants are asked to take a personality survey which assesses their need for uniqueness, need for belonging, and demographic variables. For part two, a mock fashion website was created in which participants are told to shop. Purchasing choices are then manipulated using scarcity tactics based on high demand (i.e. over 1000 sold, only X left) or on limited availability (i.e. we only X of these items total). Measured DV’s include: purchase intentions, willingness to pay, intent to spread EWOM, and other related outcome variables amongst the various groups. The results of this study can show how various needs of individuals can provide a better explanation of why scarcity works.