Behaviour Change

PROPAGANDA FOR CHANGE is a project created by the students of Behaviour Change (ps359) and Professor Thomas Hills at the Psychology Department of the University of Warwick. This work was supported by funding from Warwick's Institute for Advanced Teaching and Learning.

Thursday, February 4, 2016

It’s either NOW or NEVER: Black Friday and the power of scarcity




From personal experience, it is posters like these that make me spend money on the days that I vowed I wouldn’t spend a penny. Being constantly faced with adverts that remind you of the “limited stock” or that the sale is only lasting “for a week” creates this unbearable stress that only an impulse purchase can soothe! The well-known 'Black Friday' event is a primary example for this! The “tradition” or “calendar day”, as some may call it, began in the US where retailers sell discounted products for a limited time period within stores and online. However since 2012, ‘Black Friday fever’ has spread to the UK where retailers appear to be making good use of the scarcity principle! In November of the year 2015, retailers such as Marks and Spencers, Curry's, Argos and John Lewis  participated in the Black Friday event where retail sale volumes increased by 1.7% from the previous month. Compared to 2014, 2015 witnessed a 35% increase in sales as British shoppers splurged up to a staggering 1.1 billion!

So, what is it about Black Friday that makes shoppers go crazy?

Cialdini (1987) identifies the principle of scarcity as an effective technique in persuasion.  Humans place great value on things that are perceived as relatively scarce or hard to obtain compared to things that are easily accessible or of an abundant supply. For some reason, scarce products (due to limited supply or being available for a limited time period) appear extremely appealing and we develop a compelling desire to purchase them! The Black Friday or “weekend” effectively persuades thousands of shoppers as it applies the ‘deadline technique’ to create scarcity by placing an official time limit on the availability of discounted items.


"Battle of the bargain hunters": scenes of chaos at the 2014 Black Friday sale at an Asda superstore in Wembley, North London.

 Worchel, Lee & Adewole (1975) investigated the effects of scarcity on consumers’ perceived value. In 6 experimental conditions,146 participants were presented with cookies in an abundant supply, scarce supply, an abundant supply that was previously scarce and a scarce supply that was previously abundant. The abundant-change and scarce-change conditions were further divided into accidental and demand cells where changes in the cookie quantity resulted either from high social demand or an accident. Levels of liking and attraction towards cookies were assessed with questions such as “If given the opportunity, would you like to eat more of this consumer item” and “How attractive is the consumer item?”


Mean ratings for levels of attraction and liking in each experimental condition

As expected, results confirm that cookies in the scarce-no change condition were liked significantly more than those in the abundant-no change condition. F(l, 122) = 13.45, p < .001. More interestingly, participants tend to show a greater liking for cookies in the scarce-change conditions (both accidental and demand cells) in comparison to the scarce-no change condition. F(1, 122) = 14.19, p < .001. However, above all, cookies in the scarcity-demand conditions yielded a significantly greater desire F(1, 122) - 6.39, p < .05. These findings were replicated in measures of attractiveness where participants also rated the cookies in scarce-no change conditions as more attractive than cookies in the abundant-no change condition F(1, 122) = 17.84, p < .001. More specifically, participants expressed a greater attraction towards cookies in scarcity-demand conditions than cookies in scarcity-accidental conditions F(1, 122) = 4.26, p < .05. Whilst findings confirm our strong attraction and  motivation to buy scarce products, it also demonstrates that when product scarcity is particularly a result of high consumer demands, they appear highly valuable and we will do anything to get our hands on them before our competitors do!  

Without us realising, we all appear at the mercy of retailers who use scarcity to entice consumers through marketing and advertising. Countless adverts never fail to remind us that the sale is only lasting “until the end of the day” or is only on “whilst stock last”, not forgetting to mention those “limited editions” that are always impossible to find!  Aggarwal, Jun, & Huh (2011) investigated the effects of scarcity messages on consumers’ purchase intentions.  The relative effects of two types of scarcity messages were assessed, namely limited-time and limited-quantity scarcity messages. One hundred and twenty-one students were informed that the brand “Swatch” was having sales at an upcoming sales event.  Participants were randomly assigned to one of three conditions where they were shown promotional offers for wrist watches. In the limited- quantity condition, participants were presented with a printed advertisement that contained a scarcity message that stated: “first 100 customers only”. Participants in the limited-time condition were shown an advertisement with a scarcity message stating “only for six days” whilst control participants were not presented with a scarcity message. Purchase intention was measured using a 7 point scale with 1 indicating “not likely to purchase at all” to 7 indicating “very likely to purchase”.


Mean ratings for purchase intention in limited quantity, limited time and control conditions.

Overall, both scarcity conditions yielded higher purchase intentions than the control group. Furthermore, the limited-quantity condition generated significantly higher purchase intentions than limited-time conditions (difference = 5.25 – 4.24 = 1.01; p < .01). In other words, individuals were more motivated to buy a product when scarcity was created through its apparently limited quantity than its limited time availability.
Aggarwal et al also found that consumer competition was instrumental in influencing purchase intention. The motivation to buy products stemmed from perceived competition evoked by scarcity messages that expressed quantity constraints. This is similar to Worchel, Lee & Adewole’s findings (1975) who found that scarce products that were particularly in high demand by others were rated as the most attractive! 

So, what exactly is it about this apparent scarcity that heightens our desire for a product?  As well as being driven by the sense of urgency, those constant reminders about products being in “limited supply” or only “around for a 3 days” evoke anticipated regret, the fear of a potential loss and restricts one’s sense of freedom. Brehm’s psychological theory of reactance (1981) describes how individuals react when their freedom of choice is restricted. The scarcity that is created through sales that set time constraints limit consumers' buying freedom. As freedom decreases, this causes reactance and with freedom of choice being threatened we are motivated to relieve those restrictions through impulse buying. We literally ‘restore’ our sense of freedom by getting what we want, when we want it! 
  
When you’re trying to deal with the stress of not knowing whether your competitors’ will get that product before you do, shop assistants aren't much help either! As if the adverts were not enough, assistants appear to strategically create scarcity conditions within shops by expressing product uncertainty. For example, I cannot count a number of times I’ve heard “Well, I’m not actually sure when it will be in stock, you just never know” or “they are quite a popular one and tend to go within hours!”Gupta (2014) investigated the psychological effects of human-induced scarcity conditions on consumer behaviour. They found that when retailers express product uncertainty, it triggers emotions such as regret which appears instrumental in creating that urgency to buy! Indeed there are times when retailers experience product shortages. It happens. But most times, being replied with “It’s hard to give you an exact date for when it will be in stock” is simply the sales assistant doing her job to make you think that item is selling like hotcakes!  More interestingly, Gupta also found that other strategies such as rotating items daily within the shop and across other branches, controlling sizes in stock and not restocking items once sold were used by retailers to deliberately manipulate product availability and make you perceive scarcity.  


A sales assistant attending to an undecided customer 


So, the next time you’re worried about a product being limited in stock, relax. Chances are, it probably isn’t!





References:

Aggarwal, P., Jun, S. Y., & Huh, J. H. (2011). Scarcity messages: A consumer competition perspective. Journal of Advertising, 40(3), 19-30.

Brehm, S. S., & Brehm, J. W. (1981). Psychological Reactance: A Theory of Freedom and Control. Academic Press.

Cialdini, R. B. (1987). Compliance principles of compliance professionals: Psychologists of necessity. In M. P. Zanna, J. M. Olson & C. P. Herman (Eds.), Social influence: The ontario symposium (Vol. 5, pp. 165-184). NJ:  Lawrence Erlbaum Associates.

Gupta, S. (2014). The Psychological Effects of Perceived Scarcity on Consumers’ Buying Behavior (Doctoral dissertation). Retrieved from PsychINFO. (2014-99091-354)

Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on ratings of object value. Journal of Personality and Social Psychology, 32(5), 906.



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