Desirability, Exclusives and Brand Loyalty

This week on our marketing course we have been asked to write about theories that interest us in consumer behaviour. I find the theory around exclusive and rare items to be particularly interesting. So in this post, I’ll be looking at what makes exclusive items desirable, and how brand loyalty can increase desire for exclusive items, even if there is no immediately obvious increased value.

A good starting point for understanding why customers find an exclusive item desirable is Michael R. Lynn’s S-E-D model (Scarcity-Expensiveness-Desirability).

Graph via International Journal of Consumer Studies

Many researchers have found that customers will pay more for exclusiveness due to a belief that the item will be of higher quality; another theory behind why customers will pay more is as a show of wealth, something that Vablen describes as “conspicuous consumption”.

Arguably, there is nowhere more evident to prove this theory than video game cosmetics. These are items that are purchased by the player either with in-game money, which requires a certain level of in-game commitment, or with cold hard cash. It’s important to understand that cosmetics are exactly that, they only look different. They don’t offer boosts or improve gameplay.

CS: GO (Counter Strike: Global Offensive), has a particularly notable level of in-game item selling; websites are dedicated to tracking items’ rise and fall in pricing. Some items have fetched over $60,000 in real-world currency. Items come from loot boxes, and the rarer the item, usually the pricier.

A recent study found that the two most likely reasons a user will purchase an in-game item is either to give it to someone else, or simply for visual enhancements. These are social factors, and could potentially be linked to wanting to be seen as a higher class even in the virtual world, backing Vablen’s theory of conspicuous consumption.

But does brand loyalty also play a part in a customer’s desire to buy an exclusive item? There isn’t a great deal of research into whether a player’s time spent in a game will increase their desire to purchase something virtual from it. We can, however, look at physical shops and merchandise to help us gain some idea.

Few video game companies can claim a similar level of brand loyalty as Nintendo, so we will run with Nintendo as an example of how customers behave when an exclusive is released. Nintendo drove up a love for one of their brands, Pokemon, with the mobile game Pokemon Go. The game captured many generations of customers because it was so accessible, and it integrated so easily into everyday life. All you need to play is a smart phone. People who wouldn’t consider themselves gamers, people without the latest systems and hardware, suddenly found themselves able to enjoy a Pokemon game without paying out any cash and without having to devote time specially to it.

Graph via Recode

Pokemon has always had a strong following of loyal brand enthusiasts, however It seems plausible that some of the users were pulled in by nostalgia for Pokemon, a rekindled love for a brand that brought hours of joy and tears as a child.

Last year, Nintendo opened up a pop-up Pokemon shop in London, which sold an exclusive London Pikachu who was so damn adorable. They needed a restock within one day, and had sold out by the end of the weekend.

I’m really curious to discover if all the customers that waited in hour-long lines were brand loyalists, or if they were customers that have re-found love for Pokemon, or a huge mix! The psychology of exclusive items in the customers’ buying process fascinates me, largely because I’m exactly the kind of person who will sit refreshing a page to pre-order a figure.

Be sure to check out my recent blog on Video Game Gender Segmentation.