Scarcity and value – commodity theory

The threat of something becoming rare or unavailable seems to be a powerful motivator for action – an item’s diminished availability suddenly makes it seem that much more valuable and desirable, and in the context of consumer decision-making, it may drive the desire for and purchasing of a particular item. Obviously, economists and marketers know about the effects of scarcity on the perceived value of an object, and all those cries of “limited edition!” and “limited time only!” and “only while stocks last!” are of course designed to imply scarcity and make consumers more keen to buy. Commodity theory, first proposed by psychologist T.C. Brock in 1968, characterised the phenomenon from a psychological perspective, describing the relationship between the scarcity of an item and its perceived value. Many studies over the years have supported the relationship between the two things – the decreased availability of something does indeed lead people to value that thing more highly and consider it more desirable.

The psychological effects of commodity theory have been extensively exploited by fast fashion in particular (as described in this research paper, amongst many others). The entire premise of fast fashion is founded on fast production, fast responses to trends as they emerge, fast turn-over, and a pretty fast track to obsolescence for most items. Retailers thereby create an environment in which a particular item’s existence is fleeting – its shelf life is incredibly short because new items are constantly being introduced and slow-selling items are removed to make room for the new ones. People get to know that this is what fast fashion is about – companies like Zara and H&M and Top Shop have so wholly embraced the model that most people who shop at such places frequently enough know that if they don’t buy a particular item there and then, chances are it won’t be there when they come back the following week. It happens online too, for example, Lapin de Lune’s interaction with ASOS which she mentioned here on her Tumblr. All these retailers rely on their image of having a rapid rate of stock turn-over (supposedly in the name of staying on trend) to drive people to buy as impulsively and as frequently as possible.

That’s commodity theory at play right there. The rapid turn-over of stock and incredibly short shelf-lives form the perfect situation to create the perception that an item might become scarce at any moment, and you suddenly feel that it has become that much more valuable, perhaps prompting the compulsion to purchase the item before the opportunity disappears. It is a lucrative business model, obviously, but obviously it is not a system that is particularly encouraging of thoughtful, measured, circumspect consumption and decision-making.

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