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.

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.

Continuous Optimization and iterative testing for UI/UX – the new normal or the new essential?

Usability is the most pivotal metric in the current marketplace. Quantifying user experience and subsequent satisfaction offers substantial opportunities for optimisation. This article aims to outline the testing process, why more brands need to adopt it, with a particular emphasis on eye-tracking technology.

Usability testing is the planned study of a product’s, or application, user-friendliness and the extent to which it meets consumer needs. It is unique in that it enables insight into the black-box of consumer decision making. Individuals, myself included, often claim to know our reasoning behind a purchase decision, or user experience. Modern usability testing uncovers conscious and unconscious factors affecting usability.

Technological advancement has enabled insights firms, like InsightzClub, to generate dynamic strategies to further enhance overall user experience.

Upon determining the research objectives and samples, participants are instructed to install the tested app. The latter only authorised to access the camera with user verification. Collected data, like eye patterns and other metrics, facilitate automated software to generate relevant insights.

With respect to user experience and its considerable value to consumers, usability testing is essential in raising satisfaction. Consumers primarily engage with brands through smartphone applications instead of other brand offerings. In fact, nine in ten consumers spend leisure time on apps. Usability is widely considered to be an indispensable indicator of app success. Cost-wise, positive user experience can save as much as $100 for every $1 spent in ensuring usability through comprehensive testing. Negative experiences can impede acquiring loyal customers; unsurprisingly, negative experiences constitute the majority of unhappy users.

Direct implications of conducting targeted usability testing include revealing potential usability issues, gathering user interface preferences, understanding the consumer journey, and optimising the efficiency of relevant systems. InsightzClub’s methodology can assist brands in quantifying key performance indicators of usability to make agile data-driven decisions.

InsightzClub is a technology-driven market research start up. It has the capability to conduct comprehensive usability testing .

Beckoning consumer interest in cryptocurrency as reward or redemption – new InsightzClub study reveals

Cryptocurrencies have become the conversation of the hour in recent years. With the ability to transfer funds without third-party influence, the popularity of ‘coins’ is at its peak. Analysts claim that cryptocurrency has the potential to overtake traditional financing within the next decade.

InsightzClub, a technology-based market research firm, investigates consumer sentiment in South East Asia towards the application of cryptocurrency payments in the market research.

Blockchain technologies are the foundation of any cryptocurrency. It is a system that tracks transactional records, validates these transactions, making it impervious to fraud. Underlying concepts are complex which is why consumers may not have an adequate understanding. Only 20% of respondents claimed to moderately understand the technology, the remainder unsure or have yet to learn. In some measure, responses could be skewed by social desirability bias, where participants alter responses to appear more socially desirable. Incomplete understanding of blockchain thus impedes extensive implementation as a universal payment method in the near future.

Close to 60% of respondents were open to receiving cryptocurrency payments. To further understand the applicability of cryptocurrency in the market research industry, participants were asked to identify activities they would be willing to paid in cryptocurrency. Points redemption and survey participation were the most selected options at 86% and 83% respectively. This asserts the potential of cryptocurrency as a universal reimbursement in market research participation. Consumers, instead of receiving deposits or redeemable points, may opt for cryptocurrency. It can either be a well established coin like Ethereum, or a proprietary market research token.

Although there are some positive indicators, there still are concerns among consumers that need to be addressed. The three most common concerns cited by participants were incomplete understanding, legality, and lack of universal acceptance. Furthermore, reported comfort levels in adopting cryptocurrency as payment in market research were moderate to positive. Initiatives from government bodies and private entities may serve as catalysts in widespread usage of cryptocurrency. Incomplete information can be rectified by educational campaigns on social media platforms.

The above findings are based on a South-East Asian study by InsightzClub’s proprietary iFeed solution.

Startup of the year 2020