We are Wired to Want What We Cannot Have!

NAVIGATING CUSTOMER MINDS: Consider Patek Philippe – the grand master of scarcity. There is an eight year waiting list for a Nautilus. It transforms the watch from a mere timepiece into a narrative of patience, anticipation, and ultimate gratification. Why does scarcity trigger customer desire so much?

Usually when we consider luxury, true luxury, we think of something beautifully crafted, something reassuringly expensive and yes even something that is quite difficult to get a hold of. Where is the fun in something wonderful being easily available! In luxury, scarcity is not just a strategy but a spellbinding force that shapes desires, decisions, and behaviours.

The principle of scarcity—limiting availability to increase an item’s perceived value—has long fascinated behavioural psychologists and luxury marketers alike. Yet, nowhere is its effect more pronounced than in the world of luxury goods, where brands like Patek Philippe and Hermès have turned limited availability into an art form.

Why does scarcity trigger our desire so much?

At its core, the psychology of scarcity taps into a fundamental aspect of human nature: we are wired to want what we cannot have, it’s that simple. From the toddler having a tantrum over not being allowed to eat cake for breakfast to the heiress not being able to buy an Ombre Birkin because she wants one. The psychology (and behaviour) is the same.

This principle is rooted in two major psychological triggers: the fear of missing out (FOMO) and the allure of exclusivity.

We’ve all fallen victim to the Fear of Missing Out at one stage or another, FOMO is a powerful motivator, driven by anxiety over being left out of rewarding experiences. And it isn’t just limited to luxury brands, it happened with the new Apple VR headset, remember the rush on loo roll during 2021?

So when luxury brands announce a limited edition product, it activates this fear, pushing luxury consumers to act quickly and with urgency to avoid missing out. This urgency can often lead to impulse buying, bypassing rational evaluation in favour of immediate acquisition. When we impulse buy, all thought of price value rationale disappears. We just have to have it!

Then add in the allure of exclusivity and it becomes an urge that’s almost impossible to overcome. Owning something rare not only satisfies a desire for uniqueness but also enhances social standing. This is particularly potent when we buy luxury products, where ownership confers not just personal joy but also public prestige. Exclusivity breeds a sense of belonging to an elite club which is a powerful emotional reward. That product becomes part of our identity and how the world perceives us. In fact, it becomes part of how we perceive ourselves.

It’s mine so it’s better.

Scarcity also plays into principles of behavioural economics, such as the endowment effect and loss aversion. The endowment effect suggests that people ascribe more value to things merely because they own them—or in the case of scarce luxury items, because they *could* own them. It’s mine so it’s better. Loss aversion, on the other hand, implies that the pain of losing something is much greater than the pleasure gained from buying something of equivalent value but more easily available. Therefore, the possibility of not being able to acquire a scarce item makes it seem even more valuable.

Also Read: Why the Star Rating Isn’t Enough to Convince Shoppers to Buy

Real-World Masters of Scarcity

Producing only 60,000 watches annually, Patek Philippe are the grand masters of scarcity. It’s not necessarily an intentionally manufactured scarcity but a natural outcome of meticulous craftsmanship and the time it takes to make a timepiece. The brand’s strategy leverages both the allure of exclusivity and the psychology of anticipation. A Patek Phillipe on the secondary market is on average 25%-50% more expensive than buying the same piece retail. Why on earth would someone pay double for something that isn’t brand new? The wait. There is an eight year waiting list for a Nautilus, but for those on the list willing to wait that long, it transforms the watch from a mere timepiece into a narrative of patience, anticipation, and ultimate gratification.

Similarly, acquiring a Birkin Bag is as much about the experience and story as it is about the product itself. The scarcity of the Birkin, with its secretive acquisition process, elevates its status beyond a mere bag to a symbol of ultimate luxury and prestige. It plays on the luxury consumer’s desire for status, the thrill of the hunt, and the joy of possession, all amplified by the bag’s limited availability. Did you know that wealthy society ladies in Manhattan, LA and Hong Kong play “spot the fake Birkin” with each other. But that’s a story for another time.

But is it Ethical?

While scarcity is a powerful tool, it does raise questions about consumer manipulation and the ethical responsibility of brands. The deliberate limitation of supply to create demand can lead to consumer frustration and question the brand’s integrity. And luxury consumers are a fickle bunch, they don’t like to be toyed with.

However, in the luxury sector, where craftsmanship and heritage play significant roles, scarcity often arises naturally. The challenge for luxury brands lies in balancing genuine scarcity with consumer desire, ensuring that the narrative of exclusivity remains both compelling and authentic.

As we move forward, the dynamics of scarcity in luxury will continue to evolve. Digital platforms and social media have changed the way luxury consumers perceive and pursue scarce items, adding layers of complexity to the age-old dance of desire and exclusivity.

Brands that master the delicate balance between scarcity and accessibility will not only captivate the market but also forge deeper connections with their customers.

In the end, the allure of the unattainable remains one of the most powerful forces in luxury. Understanding the psychology behind it offers not just a window into consumer behaviour but a mirror reflecting our deepest desires and fears.