Saks, scarcity and spending

Stephanie Rosenbloom, writing in the New York Times' Business section (Thursday, May 19) notes that major chains "like Home Depot and Saks" posted earnings on Tuesday that suggested the beginnings of a rebound in categories hit hard by the recession, like home improvement and luxury goods.

The chairman of Saks, Stephen Sadova, said that Saks had shifted from "defense to offense", adding,
"A year and a half, two years ago, people were asking 'Is luxury dead?', 'Will people ever pay full price again?' What we've learned this last year, certainly this last quarter, is that they're paying full price, they're responding to the concept of scarcity, and they love brands."

The creation of perceived scarcity is a time-honoured persuasive device. But is anything sold be a major retailer truly scarce? Only if you buy into the idea that this season's It Bag will never grace the planet again. Merchants have a bag of tricks to crate the illusion of scarcity: time-limited sales and promotions, of with the silliest are the invitation-only shopping sites with their shopping carts that empty if you do not buy within minutes.

Twinning scarcity with
exclusivity is catnip to anyone who needs a shot of artificial esteem. Wait lists, pre-orders or offers to preferred customers, same thing. Display tactics such as putting only one of an item on the floor work spectacularly, and staff are trained to never let on there is backstock: it's the only one in your size!

I too am vulnerable to the illusion of scarcity, especially in these situations:

1. The rare, artisanal "find"
If I find something made by an artisan, am told it is one of a kind,
and, if there is a sweetener like a percentage of the profit donated to a cause I support, I'm a goner. That's how I ended up with a crate of pottery, or last week, a lovely but not strictly needed silk scarf made by an Indian women's cooperative.

2. I'm Here, It's Here
When traveling, especially at the end of the trip, I am afflicted with angst that I will likely not stroll this souk, troll this boutique again.

Hello Balinese bags, Monoprix bangles and aruveydic toothpaste crammed into drawers, where they surface years later. "They'll make great gifts", I sometimes rationalize, but then forget or they're not right for the person.

3. What You Resist, Persists

Am I the only one who has proclaimed a shopping moratorium only to blow it spectacularly?

Similar to the the Go-On-a-Diet-Gain-Weight phenomenon, this is a well-known psychological response to deprivation. We don't like it very much when deprivation is done
to us, and when we do it to ourselves, our little reptilian brain hisses, "Fix this now!"

"Couldn't help myself"? I can, and sometimes don't. In my case this means pearls.

Homeopathic consumption may help: instead of a dress, buy a lipstick. A friend of mine in AA says that when the urge to consume hits, they were advised to go to a thrift store with $20, no cards. (Part of the recovery process concerns making wise choices, but at the same time learning to enjoy pleasures not inherently harmful.)

But you are still spending, and if suckered by the scarcity lure, likely buying what you don't need. Retailers want you to spend habitually, so that $20 softens you up to keep going.

As for Saks, I understand the strategy; like many retailers, they're in survival mode. But I find it offensive to be manipulated by an illusion. The quote struck me as crass, with an undercurrent of contempt for the customer.

If the economy rebounds, with stores like theirs successfully stoking our luxury lust, I'll miss seeing the 'shop your closet' concept fade. But given last weeks' market volatility, maybe that wise idea has some legs.


LPC said…
$50 at the drugstore makes me just as happy sometimes as $2000 at Barneys. BTW, I could not figure out how to email you. If you can post your email/contact me, I will put it up in the body of my Paris guide post.
Susan B said…
Duchesse - so very true! I think Hermès did this very successfully with their Birkin bags, and created a pent up demand. Even now when you can easily find Birkins on consigment sites (for anywhere from $6K to $20K USD) they still sell out in the boutiques fairly quickly. I have to believe that illusion of scarcity adds to the desirability. Last year, Chanel "ran out" of their basic flap bag in black, and surprise, surprise, after a price increase they suddenly became available again.

I'm with you on allowing a little spending. Sometimes a new lippie or bottle of nail polish is all it takes.
mette said…
I can´t and won´t boast with my shopping habits. There simply is nothing to boast about. I am aware of the selling tricks. I never enter a shop during sales time, I won´t enter those `special invitations´. Helsinki is so small, that I don´t think that the boutiques can afford to miss a customer. That thrift shop suggestion was a good one, as I never shop in one ; ) I do think that the safest thing to do, is to avoid shops totally, for a while or longer. Is it really necessary to buy new stuff every season? Is it necessary to reno the kitchen every ten years?
I am by nature a thrifty shopper, but do love some luxe now and again...$20 might buy something worthwhile in a thrift shop but then they sometimes run out of good stock too...that's what keeps me going back...
I have never spent thousands on a bag...but it's early days!
Duchesse said…
LPC: passagedesperlesATgmailDOTcom.

Pseu: Luxury bags are nearly always sold via scarcity hype.

metscan: "Is it really necessary to buy new stuff every season?" The merchants would wish us to think so.

hostess: This post is about the manufacture of scarcity and its power to manipulate- whether to get us to part with $20 or $20,000.

To everyone:

Is it early morning reading that only Pseu has commented on the point of this post, the manufacture of scarcity as a persuasive ploy?

In my current sleep deprived state I am cranky. But I guess just because I found Saks' spokesperson's comments crass does not mean you would. So I am changing a line or two in this post to vent further.
NancyDaQ said…
Guilty as charged on counts 1 and 2. Not so much on count 3, so I guess I have the ability to resist. I agree, the comment was inappropriate, even if aimed at the business press. I remember seeing it in the Wall Street Journal, and thinking that the PR staff must be cringing.

I'm still shopping my closet and finding things that I stuffed in it, unworn. I guess that means I overbought!
Mardel said…
I had to go back and read your post again to see how you modified it as I had a bit of lag between initial reading and ability to comment.

I agree with you about the quote from Saks, my blood was boiling as I read that article and something similar in the WSJ. I find that kind of manipulation maddening and insulting, but I can be guilty as charged on 1 and 2 as well. I don't tend to go on moratoriums as I think they don't work, much like extreme diets, and I can be happy with a strict budget with a goal in mind as long as I can have small indulgences. Not that I haven't fallen for #3 on occasion; I just hope I have learned from past experience.

It doesn't really matter if it is $20, $200, or $2000 to me, the manipulation spoils it at any price.
Someone said…
I've heard "homeopathic" shopping also referred to as "prophylactic" - so funny to apply the medical approach to shopping.

Although I believe homeopathy in medicine is pretty much a fraud, it's a great concept when applied to shopping and I often employ it, happily generally avoiding anything I really won't use.

I do confess though that your blog is probably responsible for my now much greater appreciation of les perles. :P
Duchesse said…
nancy: The Business section of the NYT is the last place I would want to see this if I were Saks' PR!

mardel: And I stayed up way too late watching both parts of Che. Four+ hours of Marxist ideology (failed but you can see the point) hardly puts me in the mood for Saks' presidents attitude, biting the late-capitalist hands that feed him.

Someone: I'm with you on homeopathy, and prophylactic always makes me think of contraceptives. But if one shops at night, perhaps it has that effect as well :)
rb said…
I don't think scarcity is 100% illusion. The restriction of credit is very real, and most retailers have always used credit to buy their inventories. So, I can't speak for Saks, but the vast majority of retailers truly do hold less inventory than they did before the Fall of 2008.

So if you see something you really, really love these days, there is less of a chance of it ending up on a clearance rack in a few weeks.
Duchesse said…
rb; The quote says "they're responding to the concept of scarcity'.

Conceptual scarcity is quite different from actual scarcity. There may not be another of this particular Mark Jacobs sweater, but in the richest country on earth, there will be another black (or red or any other colour) sweater.

The real scarcity you attribute to reduced inventories is the market's response to the bloat that existed before the recession.

So yes, if one must have *that one*, you will view the item as scarce- and buy. In the US, with personal debt runs at about $1.54 for every dollar of income, it's worthwhile to consider what is really scarce, and whether scarcity is a valid driver of buying choice.
Beatnheart said…
Wow...I’ve been shopping at thrift stores my whole life..So I get my shopping fix there. I just benefit from the woman who have no control and buy stuff that they don’t need, like or fits them..Their loss, my gain.
Duchesse said…
Beatnheart: In thifts, we see the detritus of consumption. When I am in one, I think, "What a rich country we are".

But in thrifts exist scarcity-for the *specific* item- that Saks tries to create. There IS only one, almost never will you find the same thing in another size or colour.

But there is still astonishing choice. Last week in a thrift I saw at least eight varieties of champagne glass. Only one or two glasses per pattern, but incredible choice for a buck apiece.
Frugal Scholar said…
I think we tell the stores how to manipulate us. My father had a small market research company--1965-77--and I remember being amazed at how the consumers we surveyed wanted to be manipulated. I know that sounds harsh--but it's true. Perhaps seeing things from that angle has made me somewhat--not totally--immune to marketing manipulation.

Also, I worked in a vintage shop back in grad school and saw how the notion of scarcity worked. We would hold things for people for a few days, but often they were so scared we would sell the item before they returned that they would snap it up on the spot.

Going to a thrift store and seeing miles of items once ardently desired is a real desire-killer also.

Finally, I will proudly own the term prophylactic shopping--used it a few times in my blog to describe shopping to keep you from shopping too much (i.e. the lipstick instead of the purse).
Duchesse said…
Frugal: Do you mean we 'tell them' by responding to the tactics I have described? Have you read Paco Underhill's "Why We Buy"? There are many merchandising tactics of which customers are not aware, or if they are (such as where merchandise is placed), they don't care.

Since the 1960s, the field of data analytics has developed, giving an infinitely more detailed picture of consumer behaviour.

Claim your coinage of "prophylactic shopping" proudly!
Cheapskates will tell you that to get a matching set of crystal stemware, estate sales are the way to go.

I find the everyday glassware available at charity shops and church bazaars can be much better than run-of-the-mill new stuff, because so much of the latter is very cheaply made in China and other low-wage countries. Nothing as durable as French Duralex and Arcoroc.

The underlying issues, as explored by Paco Underhill and other students of marketing psychology, is why we all need "stuff" (beyond the necessities of life) to feel complete. And that is true, in the richer countries among the poor almost as much as among the rich. Of course they buy far less stuff, but they also buy shoddy cheap stuff although it obviously won't last.
Tiffany said…
I don't greatly enjoy shopping, and I enjoy being patronised and manipulated by the purveyors of luxury items even less ... But I do fall for the 'I'm here, it's here' when I travel, and tend to feel rather sheepish afterwards.
I hope that people continue to shop their own closet before buying, purely from an environmental perspective. Too often I see the same garment repeated over and over in a wardrobe because the owner 'forgot' they already had one and bought more.

I think that quality won't ever go out of style, when money is tight, we may have to cut back so will crave great quality more.
Rubiatonta said…
I hate it when businesses think I'm stupid! And that's exactly what that comment shows. Fortunately, in my years on this planet (48, tomorrow - how did that happen?), I've learned not to take their word for it!

For me, these days there's very little reaction to "luxury" - scarce, or otherwise. Originality, charm, quality, "me-ness" (for lack of a better word) -- that's what gets me to buy. But not always in the same way...

I divide my wardrobe and accessories into two categories -- the basics, like white cotton bootcut pants, that I'm perfectly happy to buy at Old Navy and wear for a season until they get ratty and I recycle them -- and the "Rubi" pieces, like a blouse I made for myself with a Kaffe Fasset challis print fabric, which will make those ON pants sing. Nobody else is going to have the blouse, so I don't really care if a million or so others have the pants.

And when I suspect that I've let myself be hornswaggled by some perceived scarcity, I usually leave the tags on the item and give it what my mom wisely calls "the Resurrection Test." As in, if I still love it after three days, I keep it. And if not, I take it back. No harm, no foul.
Duchesse said…
lagatta: I collect mismatched glasses deliberately. The matchy look is not me. I have found really lovely crystal at ValueVillage (a short walk from my house) and many pint glasses for my beer-drinking sons and their friends.

tiffany: My FIL laughs and says "Tourists spend money."

Imogen: Really great point about the environment, thanks!

Rubiatonta: I absolutely love your philosophy and admire your skills. That sounds like one gorgeous top.

re the Resurrection Test, I'd have to limit my sources, so many boutiques will only give credit instead of full refund.
Oh, I like mismatched too. Not only glasses but old wooden furniture. But matched is out there for cheapskates that want it!
Belle de Ville said…
Unlike the president of Saks, I actually work with produts that are either one of a kind or one of just a few. No false forced scarcity of my products and manipulation of my clients.
I totally resent the Hermes approach to business, yet when other luxury goods firms are faltering, Hermes is still making money. It never ceases to amaze me that consumers will buy into the luxury scarcity story.
Duchesse said…
Belle: I've never regretted a fine jewelery purchase though avoid the mass brands that are knocked off. Hermes is one brand I like b/c of the quality and service. For example, Le Duc has a crocodile briefcase bought at auction. Hermes refurbished it at no charge.
I receive far more attentive service at their boutique here than at high end dept stores or most boutiques. Still, the bag scarcity thing is weird, but I don't buy them.

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