(image via maosuit.com)
Implementing any kind of buying impediments might appear to be a disadvantage to both retailers and consumers, but recent studies show that luxury items are still experiencing growth in revenue amidst the economic slump. Rather than being a deterrent, there’s a high probability that these hindrances boost sales instead.
Here’s a breakdown of the most commonly used kinds of shopping restrictions:
– Price points – The main aspect that discourages consumers from making a purchase is the high cost. An expensive price tag would make a customer think twice, or thrice, before spending.
– Quantity produced – Only a few pieces are created per design or style, which leads to having waiting lists or lines for the most coveted items.
– Seasonality – Upscale retailers release their collections on a seasonal basis, and that’s why – as opposed to mass-produced items – a lot of these commodities can only be purchased within a particular time.
(image via highdefdiscnews.com)
– Outlet channels – The more high-end a certain label is, the lesser is its presence to the public. You won’t see these names in just any other department store, but instead, you’ll have to seek their boutiques out.
– Special presentations – This pertains to displays, exhibits, and runway shows, to which only a limited number of people are invited.
Take Chanel and Louis Vuitton as examples. These two are among the most revered fashion labels in the world, and among the brands that exemplify the highest form of exclusivity. Chanel does it by opting out of online retailing of their clothes. If you want to purchase the pieces they show on the runway, you’ll have to make a physical appearance at one of their boutiques for a proper fitting. Louis Vuitton, on the other hand, has never and will never offer discounts or sales, unlike their peers and competitors.
Another example is the Hermès Birkin – the most lusted after handbag in the world – which is not only known for its price tag, but also for its long waiting list. Stories of having to be on standby for as long as 6 years before acquiring a piece seem to make this statement item all the more desirable.
(image via Heritage Auctions)
While there are brands that have achieved success by limiting potential customers’ access to their merchandise, this approach won’t work for all. So should you risk it in the first place?
Well, it’s all about knowing how to play into the consumers’ psychology of buying. Withholding merchandise creates scarcity, which makes the shoppers want it even more – to the point that they’ll endure long waiting lists and lines, and use up all their hard-earned money for a taste of luxury.
(image via dailymail.co.uk)
Moreover, purchasing restrictions tap into the customers’ emotional rationalization that makes them justify their “need” for a certain item—whether it’s due to having a sense of urgency created by the limited availability of the object they want, or as simple as having the desire to satisfy their self-esteem by partaking in an exclusive lifestyle.
So if you think you can master the art of creating demand through scarcity, give it a try. Who knows, this strategy may become the driving force behind your staying power.