Consumers flock to brands playing hard to get

Author: Daphne Kasriel

Date published: 28 Sep 2007

Consumers are clamouring for the injection of a rare quality into brand offers. Whilst rarity is more than ever a key mantra for the high-end luxury sector, 30 and 40 something affluentials, babyboomers, Generation X and Y and 'creative class' consumers are also buying into buzz around rarity appeal – as many argue that successful selling is more about building multiple niche aspects than traditional mass appeal. Commentators view this quest for rarity as driven by a widespread feeling that we can rise above our depersonalised society by standing apart from the masses.

Key trends

A [rarity] buzz for the masses;

Limited edition via retail style palaces and pop-up brand spaces;

Rarity retains and ups its key appeal to high-end luxury consumers;

Rarity appeal taking hold in Asian markets.

Commercial opportunities

Brands across a range of sectors can use special editions to sell similar products to consumers multiple times, or hold back to maintain a market in future;

Instead of offering new mass market goods, companies should increasingly think about competing to give consumers more personalised products and experiences;

Brands should consider how they can offer their customers 'massclusivity' on their products or services. These can be new, or just newly presented with innovative add-ons.

Background

Commentators wax lyrical about the decline of mass marketing for today's consumers, and the paradoxical democratization of luxury in recent years. The masstige (prestige for the masses) meeting of luxury and mass consumption or 'massclusivity' (clearly visible in designer collaborations with high street chains), is celebrated by retail guru, Vittorio Radice (now heading Italy's Rinascente department store chain). He believes the tension between the mainstreaming of luxury and the retaining of its exclusivity is resolved by consumers enjoying access to a lifestyle through one of its accessories. “People buy things for what they represent. Nobody buys commodities [in themselves] anymore, other than in the developing world…the whole world is trading up”. His take on the demise of one-size fits all: “The generic product doesn't have a future”.

Massclusivity is about the majority consumers seeking elements of quality in goods and services to make them feel special and different from the crowd, and NOT about exclusivity for the wealthy. We are granted the luxury of using the same model of DVD used by Madonna. The limited edition trend is about tweaking widely available goods and services to create an air of exclusivity and a different kind of status.

Consumer radar registers that limited edition conveys a sense of urgency as well as rarity. It is not necessarily an offer of new material, but packaged in a more complex or attractive way e.g. special edition cars, 'invitation only' emails such as gmail (with an estimated five million accounts) mobiles, 'Director's Cut' DVDs with additional unreleased/digitally remastered material etc.

Meanwhile, luxury manufacturers and retailers are turning to 'planned scarcity' to meet the needs of status-hungry buyers yearning for exclusivity because bling, that traditional totem of wealth, has gone downmarket. With globalization and the emergence of BRIC markets, the luxury brand extension of European brands has made them appear over-available.

A related consumer trend is a broader modern take on the customization approach - consumers demanding an adjustment to the product to personalize it, even participating in the design process – often known as 'fingerprinting' or mass customization. For examples Starbucks lets customers customize their coffee in 19,000 ways a winning formula in 25 countries – helping the company achieve a 20% increase in net revenues for the third quarter of 2007.

The excess of consumer choices, dubbed 'consumer vertigo', is also given as a reason for the popularity of limited lines and the desired limiting influence of expert style gatekeepers such as personal shoppers and interior designers.

A [rarity] buzz for the masses

Consumers are flocking to the deliberate creation of a buzz around brands creating an illusion of scarcity. With the mass of consumers, brands can create a buzz via a hyped launch date (witness the launch of Apple's IPhone and special games consoles giving a whiff of scarcity, or the popularity of novelty edition cigarette packets among Russians). One part of the dynamic is that consumers want to be the first to own or experience the product, the other, that the product is going to run out.

The partnerships between elite designers and cheap retail chains have been a hit with consumers internationally and rely on a mix of good prices, scarcity and mass consumers being given the chance to own a designer piece. Retailers have prospered from the generated hype and sell-out fast. Stella McCartney's collection for H&M, for instance, sold out within hours. This 'unavailability' was deliberate. The collection was a one-off and H&M basked in the consumer frenzy and related media coverage, plus the influx of shoppers for their regular lines. According to H&M marketing director, Jorgen Andersson, the company's collaboration with McCartney: “was the ultimate in massclusivity. If we had these designs in the stores for month, people would get bored”. Designer Karl Lagerfeld, who also collaborated with the brand was critical of the resulting consumer disappointment, and this “snobbery created by anti-snobbery”;

Designer Vera Wang's September 2007 launch of her 'capsule collection' for US chain store Kohl's in 46 states, was preceded by consumers blogging about sneak previews.

Starbucks's new 'Ramadan Frappuccino' only available during this Moslem holy month, is the first localized beverage to be specially created for customers in their Middle East branches, and features a 'date-dazzle' topping designed to appeal to Arabic palates;

Eco tourism organizers have found that species rarity fuels consumer interest as well as conservation efforts;

According to NPD, 'BioShock' was the third best selling gaming title internationally for the August 2007 period. Their limited edition version helped arouse consumer interest says the marketing director of its creators, 2K Games. The company had polled consumers via their website on which ad-ons should go in the special edition. In the event, 5000 were produced, but 18,000 consumers signed an online petition requesting it;

Hershey Foods report that their limited edition confectionery continue to be a source of profitable growth, which alongside product innovation upped sales by 7.5% in the last quarter of 2005. With a typical lifespan of 8-12 weeks, limited edition items proved traffic generators and buzz builders;

Consumers can become passionate about discovering a limited edition item. There's a website devoted to lovers of dark and white chocolate versions of the usually milk chocolate Kit Kats.

Limited edition via retail style palaces and pop-up brand spaces

Last year, Surface Magazine and Bombay Sapphire gin held 'Sapphire-inspired', a week-long pop-up shop in New York featuring drink-inspired limited edition fashion and interior design products. It attracted over 1000 consumers.

The Nike ID Design Lab in New York limits visitors to three at a time, by appointment, coming to customize their trainers. For shopper, Josh Rubin, “wearing them is as much an opportunity to express your individuality, as it is a chance to tell the story of being in the Lab” which has also appeared in Paris, Berlin and London (a pop-up store).

Colette, the Paris emporium of 'styledesignartfood' is full of limited edition pieces for the style-obsessed such as Marc Jacobs's limited edition toy (1000 made).

Rarity retains and ups its key appeal to high-end luxury consumers

Luxury brands have traditionally thrived on the thrill of scarcity. Consumers of high-end products are indulging themselves with more slightly harder to obtain products to signal they've 'arrived'. This rarity relates to 'trading up'. Companies are creating products that are more expensive/high-end, and slightly less immediately attainable to enable wealthier luxury consumers to stand out in this era of over accessible luxury, and luxury brand adverts by companies such as Louis Vuitton splashed on billboards everywhere.

“Customization is a direct reaction to the saturation of the market” as well as the speed at which high-end goods are copied, mass-produced and sold cheaply, says Pierce Mattie of Armani Atelier. Even 'the masses' are subject to a food chain! Mattie is careful to point out that high-end luxury even wants to stand out from the “latest trend-following masses” – a development that's been termed IDvidualism. The only way to really stand out is with a limited edition (though still transmitting signals to other stylish people 'in the know').

'Planned scarcity' resembles limited edition reproductions in the art world. Online etailer 20ltd, which launched in April, promises “unique limited editions…made in extremely low numbers [that] will never be made again [and] cannot be purchased anywhere else in the world”.

20ltd hopes to penetrate growing luxury markets like Russia, China and the Middle East. Their website comes in Russian, Italian, Chinese and Japanese flavours.

One of the key ingredients of hit designer etailer, Net-A-Porter, is sourcing hard-to get brands like Burberry Prorsum. It attracts 90 new customers daily, from 101 countries, each spending an average of £400.

In renaming its new high-end space the Wonder Room, 'a “temple to rare luxury”, UK department store, Selfridges, has become one of the latest to try to redefine what the concept – and its sub-genres of luxe goods, travel, service - means.

Rarity appeal taking hold in Asian markets

Asian markets are emerging fans. Ledbury Research, high-end consumer behaviour analysts, reveal that in Japan, for instance, traditionally a key market for luxury brands, consumption is picking up but with a shift. “Historically, Japanese consumers have tended towards the large global luxury brands, but now we are seeing more and more consumers there start to look for slightly more niche brands, things perhaps that others haven't heard of. And there is exclusivity and a kind of kudos that comes with that”.

“If you own something that's a special edition, you suddenly feel like you've become something” believes Lee Hwa-jun, of South Korean Cheil Communications. “That's the driving force behind the marketing of special editions and more local marketers have recently noticed the trend”. While special or limited editions have been common in US or European markets, he observes, they haven't been noticeable in the local market until lately. For instance, Koreana Cosmetics recently released a 'Chuseok” (Korean thanksgiving) special edition skincare set covered in precious mother-of-pearl. Company spokesperson Baek Jin-ju reports that the limited availability set is already sold out via pre-orders.

Hong-Kong-based YesAsia.com, specialising in popular entertainment for Asian audiences, features a multitude of limited edition offerings for their global base of over 700,000 customers in over 150 countries.

Animation-loving Japanese 'otaku' or geek hobbyists - once lampooned and now a cult consumer group, are famed for their love of limited edition action figures. Now otaku consumers sharing this obsessive connoisseurship for products are noticed in blogging, fashion, cars, electronic goods and spas, and are engaging marketers.

Outlook

Expect more 'fingerprinting' or mass customization from brands pandering to consumers' love of individualism.