Scarcity Marketing as a Driving Force for Product Adoption – an InsightzClub perspective

Have you ever been shocked to find hundreds of people queuing up overnight for a sneaker release (colloquially known as a drop) priced at $400 a pair? Or a limited drink run at a franchised cafe? These are clear examples of scarcity marketing in practice/the wild. It is a marketing tactic or strategy that takes advantage of human psychology with intentional unavailability. ‘You want what you can’t have’ outlines the commodity theory; the more unavailable or scarce a product is, higher the desirability. A product’s quality or features may not necessarily be superior to the competition, but it’s exclusiveness makes it so.

FOMO is a killer. The ‘fear of missing out’ can drive demand to unprecedented highs. Fear is a primary human emotion – it can be rather motivating. We do not ever want to lose out on an experience, especially when it’s been deemed socially desirable. Marketing losses is more powerful than gains.

InsightzClub, a tech driven consumer insights firm in this article reviews the role of scarcity marketing and how marketeers may use it.

So long as there’s perceived unavailability, there’s potential for sales to be maximized. Brands vary in their approaches to this marketing tactic. Limited supply, time, and membership exclusivity are primary orientations of scarcity marketing.

Limited supply offers products the characteristic of unparalleled exclusivity. The example we led with in the beginning of the article represents this. Many luxury brands maintain a similar marketing strategy; using exquisite materials and a limited run, or regular materials that are easy to obtain and produce coupled with an artificial production limitation.

Pumpkin spice lattes registered 424 million sales in 2019. Any barista in a third-wave cafe could whip up a drink with a better flavour profile and reasonable pricing. Its seasonal availability, restricted to autumn months, accounts for most of the fanfare surrounding the drink.

The recent surge in popularity of IOS app Clubhouse reflects membership exclusivity. To join the app, a referral was needed. Perceived scarcity was then two-fold: availability limited to Apple products, and registration only upon referral. The media frenzy that followed, in retrospect, clear from the Clubhouse marketing strategy.

Scarcity marketing taps into fear, and a deep-seated need to comply with societal values. Brands have developed capabilities to drive up prices, and sales, with relatively simple tactics to increase perceived scarcity; even artificially. Along with market research to identify pressure points for target consumers, scarcity marketing may only grow in strength.

To understand more on consumer behaviour and insights reach out to InsightzClub to know more about our solutions.

Mounting interest in micro investments in South-East Asia – An InsightzClub study

Cryptocurrency token values have broken their respective barriers in the past week as Coinbase raised $89 billion in the first crypto listing on the stock exchange. Other  investment opportunities have also become mainstream among day traders via apps like Robinhood. InsightzClub, a technology-based market research start up, examines key findings from a regional study on micro investment behaviour in SEA.

The majority of the study’s participants, or 78%, reported having at least a moderate understanding of investments. Only 8% were considered to have high understanding. These figures may be explained by the often-complex nature of investing – trading jargon and calculations. Furthermore, in the Singaporean market, 60% of investors had a total investment value of S$10,000

There are a wide range of assets deemed as viable investments. For the purposes of this study real estate was excluded as it is rarely offered on major trading platforms. Stocks were the most selected investment at 66%, while the second was cryptocurrency (50%). This was followed by bonds and unit trusts. Stocks have long been the frontrunner with regards to popularity and accessibility. The relatively small difference between the number of individuals investing in the stock market and cryptocurrency may be an indicator of shifting consumer sentiment. Recent rallies of Bitcoin, Ethereum, and Ripple to all-time highs has also served to induce higher trading volumes. Although an extremely volatile and high-risk market, returns can surpass that of traditional investments many times over. Overall, responses point towards a diversified investing strategy that stabilises risk and raises annual returns.

It is no surprise that 70% of participants selected retirement as the primary motivator for investing. Intelligent investments at a young age can support early retirement goals. Security was the second most selected reason at 48%. Uncertainty has become the hallmark of global economic conditions despite the slow recovery from the COVID-19 pandemic. As predicted, bullish markets have also induced higher investment volumes among SEA consumers.

There are hundreds of trading apps for consumers to choose from. The largest and most popular can hold assets in the billions of dollars. Among the study’s participants, Binance held the majority (32%). It is the largest global cryptocurrency trading platform; hundreds of coins are available and the investment process is relatively easy for newcomers. Surprisingly, Coinbase was not selected by any of the participants, despite its popularity. Luno, another cryptocurrency platform, was used by 24% of participants. It is highly popular in Malaysia and Singapore as it offers quick transfers and deposits from local banks. OctaFX was the third most selected option, with Charles Schwab and WeBull close behind.

With countless platforms to choose from, it is important to understand the reason(s) behind consumer preferences. User experienced ranked first among SEA consumers. As shown in a previous InsightzClub study on usability testing, user experience can determine the success or failure of an app. Recommendation was second at 46%. Many trading apps have referral programs where users can earn commission by inviting a friend to join the platform. In a saturated market, word-of-mouth becomes trusted as it is easier to understand and the source is familiar.

To know more about micro-investments and other consumer based choices and brands, reach out to InsightzClub to know more about our solutions.

Death of third party cookies and implications for marketeers- an InsightzClub review

Google has begun testing its alternative to third-party cookies in an aim to improve user privacy in a paradigm shift away from individually personalized ad offerings. At first glance initiatives like these seem ostensibly beneficial for all parties involved. InsightzClub, a tech-based  consumer insights start-up, reviewed the implications for brands and marketeers

In January of 2020, Google reinstated their commitment to phase out third-party cookies over a period of two years. Cookies are small data files collected through a browser and stored locally on a user’s device.

From a privacy standpoint, consumers may slightly benefit form a transition to first-party data and grouped ad targeting.  Advertisers may however find it more challenging to target users with the same effectiveness, inducing them to collect data in less than ethical methods. It is not uncommon for black markets to blossom as a result of ‘red tape’. Furthermore, businesses could be enabled to target cohorts based on race and other differentiating characteristics that may otherwise be restricted. Companies using Facebook’s solutions that share a similar cohort-level personalized advertising approach have been shown to racially discriminate against consumers.

Procedures for releasing targeted ads will definitely evolve as FLoC is tested. For the moment, marketeers will need to use first-party data to target cohorts or use Google’s solutions. It is now the company’s responsibility to collect data and generate insights, even if Google Ads is the party delivering ads. Additionally, the undeniable ethical responsibility of companies collecting data is not a matter to be taken lightly.

Marketers are scrambling to collect large amounts of data in preparation for the inevitable removal of cookies. There is a clear need for marketeers to become savvier in how they target consumers. One potential solution is to understand their consumers to the best of their ability along with the collection of first-party data. Tech-based market solutions offered by firms like InsightzClub will be imperative in a cookie-less future. For instance, utilising a comprehensive understanding of the consumer journey with other key touchpoints can help marketeers bypass the need to work with Google’s FLoC solution. Combining first-hand insights and data collection, with Google’s FLoC approach seems to be the most ideal solution.

Marketing is a dynamic industry, and once again, professionals need to get with the times to mitigate potential adverse effects of Google removing third-party cookies. Established solutions are currently available for brands to tap into to move forwards. It necessitates strategies built upon a thorough understanding of target consumers and optimizing data to engage said consumers.

New InsightzClub study uncovers interesting findings on streaming and lossless audio

The music streaming industry has grown immensely in the past decade; representing 83% of the music industry’s total revenue. Spotify, the largest music streaming service, have announced ‘Spotify HiFi’, a subscription tier with improved playback quality. In a recent South East Asian study into music streaming habits and consumer responsiveness to lossless audio, InsightzClub, a technology-based market research start-up, revealed intriguing and actionable insights.

All major music streaming companies are striving to offer the most attractive package for consumers, which may include enhanced audio playback. Lossless refers to uncompressed audio files, or higher clarity. Previously, larger file sizes incumbered companies from integrating this feature, now surmountable by numerous technological advancements.

Among survey participants, Spotify Premium was the most subscribed to service (70%). This was followed by YouTube Music (54.9%), Apple Music (25.5%), and Amazon Music (15.7%). In the South East Asian region, Spotify has the largest market share due to their dominant presence as the go-to music streaming service. Apple Music is popular among Apple iPhone users. Android compatibility is less accounted for as compared to Spotify’s cross-platform strategy. Only 5.9% of participants are subscribed to Tidal. It is less accessible and known among the demographic.

Listening habits were found to be relatively consistent among participants. 94% were active listeners, using their preferred music streaming service at least several times a week. This may further indicate the established movement of consumers away from physical offerings, like CDs and vinyl records. Additionally, it might be in due to the COVID-19 pandemics, where outdoor leisure activities have been restricted. The most enjoyed genres were pop (65%), K-pop (52.9%), R&B (49%), and hip-hop (47%).

Lossless audio has slowly progressed into a desired feature, apart from audiophiles and industry professionals. Survey responses indicate that 67% of consumers, in some capacity, are aware of lossless playback. Despite this high degree of awareness, the majority of participants (62%) were insufficiently informed of how lossless playback worked, along with its benefits.

Often, consumers of lossless audio tend to listen on high-fidelity devices. In InsightzClub’s findings, adoption of such devices was reportedly widespread at 80%. Further analysis reveals that this may in fact be lower; ‘audiophile’ devices tend to be niche and mainstream as compared to the most.

When asked to identify reasons for preferring their current streaming service, participants most frequently selected audio quality (70%). This value is especially interesting as the Spotify, YouTube, and Apple Music offer lower quality playback. Availability of content was the second most selected reason at 65%. Streaming platforms do sign exclusive licensing deals with labels, which may serve as incentive for some users to prefer that platform. Pricing was the third most important reason for consumers (47%).

Although previous data suggests improved audio quality may be the primary motivator to switch services, it is not supported by the data. Improved subscription pricing was identified as the strongest motivator (69%), while audio quality was second at 61%. Conversely, consumers might still be willing to spend on lossless audio streaming. When asked to indicate their willingness to pay a higher fee, 77% of respondents were mildly or highly interested. It may serve to prove that current Spotify subscribers could upgrade to the upcoming Spotify HiFi tier. This is appliable to other platforms that may introduce a lossless audio playback.

InsightzClub’s South East Asian study on consumer preferences in terms of lossless audio playback and music streaming has yielded some surprising findings. Music streaming companies could find it highly profitable within the SEA market to introduce lossless streaming at competitive prices to retain existing subscribers and attract users of rival platforms.