Does limited supply promote brand loyalty or brand switching?

Wednesday, 29 October, 2014


What would the fans of Snickers bars do if their favourite chocolate was temporarily out of stock? Would they wait for it to be available again or would they switch allegiance to Milky Way or Kit Kat? And would the behaviour switch be permanent or temporary?

According to a new study in the Journal of Consumer Research, when you can’t get your favourite product, you’ll quickly forget about it if you can find a good replacement.

“We studied situations in which products are temporarily unavailable. We found that desire for a product depends on the amount of time that has passed since a consumer was able to consume the product and the availability of substitutes. Consumers desire a product more over time if substitutes are unavailable, but desire the product less if substitutes are available,” wrote authors Xianchi Dai, from CUHK Business School, Chinese University of Hong Kong, and Ayelet Fishbach, from University of Chicago Booth School of Business.

Over five studies, the authors studied how much consumers missed, liked or wanted to consume something they could not have. In one study, participants were asked to stop using Facebook for three consecutive days. During this time, they were allowed to use other social media platforms like WhatsApp.

Consumers who were allowed to use another social media platform wanted to use Facebook less by the third day. However, the opposite was true for consumers who did not use another social media platform and their desire to use Facebook was higher on the third day than at the beginning of the study.

In other words, how much a consumer desires a product is based on the length of time that passes before they can either find the original product or a suitable replacement to satisfy their craving.

However, a ‘limited supply’ message, such as “While supplies last!” can backfire if the consumer cannot find the product. “If a company restricted the supply of a product in a way that someone could not find the product at all, they would likely develop new tastes for a substitute product and desire the original product less over time,” the authors concluded.

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