Many years ago I spent some time discussing online & mobile marketing plans with Blockbuster in the UK, trying to figure out how to apply an appropriate business model for their relatively unusual marketing requirements.
The sticking point for them was what was termed the ‘anticipation of disappointment’. The scenario is this:
- you are on the train home and decide to reserve a film to view – it’s 2002, so the DVD I want to rent is Minority Report.
- my local Blockbuster has a dozen copies of this film to rent out
- there is no way to link (in real time) in-stock DVD rentals with the web (or mobile for that matter
So I’ve decided that I want that film, but I know from experience that I cannot guarantee to get it. As my train journey progresses, I’m anticipating disappointment – and planning for what I will do if all the copies are out.
Now Blockbuster put a lot of time, thought and resource into countering that problem, but is is a significant issue for the business – and they needed a strategy to encourage people to deal with it without losing future custom.
There are whole categories of business that do this really well. Luxury brands are high on that list: Chanel have released a Jade nail varnish that has been the buzz colour of the year:
“Having sold out in 40 minutes (for £16 a pop), Jade is now a collector’s item. Bottles on eBay (possibly placed there by impoverished beauty editors since hardly anyone else managed to get hold of it) are fetching £84.”
Similarly, Swiss watchmaker extraordinaire, Jean-Claude Biver, who runs Hublot strongly believes in creating scarcity. In boom times he under-delivered against orders for his highly prized – and priced – watches.
Hublot has significantly outperformed the Swiss luxury watch market even in the past year – a period that has seen brutal declines of sales figures for his competitors.
Tchibo is one of Germany’s leading retailers. It’s an extraordinary business to British eyes: they completely revise their product range each week on totally different themes, stocking low-cost versions of popular products from luxury watches to laptops to kitchen appliances and clothing. Some of their sales items are enormous bargains, and consumers go out of their way to try and buy one… only to discover that they have sold out, Chanel-style, in the first 40 minutes.
This anticipation of disappointment is part of Tchibo’s brand proposition. It’s the trade-off against exceptional value. I’ve met many Germans who LOVE Tchibo.
I’m sure I don’t need to elaborate on the high-profile exploitation of scarcity in supply for items Sony Playstations or Xboxes. Variations on the same themes.
But there is a common thread through all of these: the disappointment is part of the brand promise. It underpins part of what makes the brand proposition work. And it is reinforced by a degree of exclusivity: other people make green nail polish, but it’s not Chanel Jade. Other games consoles are available, but it’s the PS3 I really wanted. The difficulty of buying a new Ferrari is part of the mystique around owning one.
Most retailers or suppliers have a different problem. In the Blockbuster case, their answer was to carefully balance supply and demand so that during the first couple of weeks of release, there were sufficient copies of a title on hand to meet the initial surge of interest. They then sold off second-hand copies that were surplus to later requirements… aided by the delay between rental release and full retail release.
Other retailers are less able to deal wtih the problem: my local cornershop in London routinely runs out of the weekend newspaper I want to buy before 10am. The result? I no longer trouble to go there at the weekend because I’m anticipating disappointment. But there is no trade off, just pure frustration.
Too many other organisations fall into this trap. And it breaks the brand promise.