Limited-edition items have a special allure that sets them apart from other products. But is there more to why these limited-time-only items always sell out?
Why is everyone dropping limited-edition items? Why are small businesses to global corporations dropping limited releases during a time of abundance and mass manufacturing.
And more importantly, why are people still willing to pay through the nose for limited-edition items? We’ve listed 7 psychological reasons that drive consumers to purchase unique, limited-edition items.
1. Scarcity Effect
The scarcity effect operates by tapping into a shopper’s FOMO (fear of missing out), leveraging the psychological principle that we are naturally drawn to items that are highly sought-after.
The scarcity effect is a bias where scarce objects are more valuable and abundant ones are less so, as scarce products capture our interest and become more desirable. When we see these limited opportunities, we feel like we need to act quickly before we miss out on something special.
But the scarcity effect doesn’t just make us act fast, it also makes us willing to pay more. By creating the impression that a product or service is rare or exclusive, businesses can justify charging higher prices.
2. Novelty Effect
In the highly-saturated world of retail, consumers are often looking for new, unique items. Psychologically, it’s all about the short-term performance gains that arise from external stimuli. In other words, when you see something in a new and exciting format, your interest is immediately piqued. And that’s exactly how businesses capture your attention.
The brain’s “ventral tegmental region” is activated when encountering something new, triggering the “novelty effect” and the “reward system.” The more dopamine released, the stronger the effect and the more neural links are formed.
A study by Lindgrin and Vanhamm found that surprise is a powerful marketing tool that can emotionally engage customers and stimulate purchases. Retailers must constantly offer new and surprising interactions with goods to keep customers engaged.
3. Emotional Value
Limited edition products often have a strong emotional appeal, whether it’s a special edition release of a favorite brand or a product that supports a cause. These products hold a particular emotional value that can drive sales, which appeal to consumers who value exclusivity and individuality.
According to a study on the desirability of limited-edition products, the emotional attachment to scarcity makes it more gratifying for customers to get their hands on limited-edition items. By catering to their emotional and social values, limited edition products can generate increased sales and leave customers more satisfied.
4. Social Proof
People tend to follow the actions of others, and this is especially true when it comes to buying limited-edition items. Psychologist Robert Cialdini’s theory of social proof suggests that when we’re unsure about what to do in a particular situation, we look to what others are doing to guide our actions. Simply put: what we see others purchasing impacts our own purchases.
Statistics show that social proof has a significant impact on consumer behavior. For instance, a whopping 82% of Americans seek recommendations from friends and family before making a purchase, while 70% of people trust recommendations from strangers. People are especially driven by social proof when buying limited-edition items, whether it’s celebrity endorsements or customer reviews.
5. Status
There’s something special about owning something that not everyone can have. Purchasing limited edition items provides buyers a feeling of acknowledgement and prestige.
According to a study on brand dilution, limited edition items tap into consumers’ desire for status, as evidenced by participants’ willingness to pay a premium for a limited edition item. The limited-edition items consistently outperformed the regular edition in all measured variables, with the participants showing a greater desire for social recognition and status.
6. Collectability
Limited-edition items are not just regular products with a fancy label slapped on them, they are collectible items that add an extra layer of value and exclusivity. When a product has a one-of-a-kind design, it becomes even more desirable, especially to collectors of limited-edition items.
Public features of limited-edition collectors are testaments to this. We’ve seen it all: Coca-Cola cans, Star Wars Lego figurines, and even Monopoly board games.
Purchasing and collecting limited-edition items drive a sense of urgency to buy them, while igniting a sense of passion among consumers to collect and own something truly special.
7. Perceived Value
When it comes to buying a product, we all want to get the best value for our money. The perceived value of an item is the key to driving sales, and it’s all determined by the price we’re willing to pay. As consumers, we’re constantly assessing a product’s ability to meet our needs and deliver satisfaction, and this analysis is often done on a subconscious level.
By simply limiting the supply and increasing the price, companies can increase the perceived value of limited-edition products, thereby making them more desirable to consumers.
M2.0 is a communications agency specializing in business, technology, and lifestyle communication. Learn more about our work on our case studies page.
