Target may not be 'Wu-ing' shoppers with scarcity tactics

Feb. 20, 2012

Jason Wu merchandise may be nearly nonexistent in Target stores, but at publication time 4,207 items marked as "Jason Wu for Target" were available for purchase on eBay; that's a huge decrease from the more than 11,000 pieces for sale on the site Feb. 5, the day Target launched the designer's line ranging in price from $19.99 to $59.99 per item.

Wu merchandise was available in 12,000 of Target's 17,063 stores as well as on Brick-and-mortar stores did not have a quantity limit on its products, said Josh Carter of Target, which some early-bird shoppers took advantage of by buying carts full of merchandise to resell on sites like eBay. One angry shopper filmed this video showing a couple buying a Miami store's entire Wu inventory. (Warning: Contains profanity.)

"The launch for collection has been strong," Carter said.

That seems to be quite the understatement. Style site reported that products were flying off the shelf and that even was running low on inventory on launch day, despite its two-pieces-per-style purchase policy.

Target "increased the amount of product" it ordered from Wu based on customer reaction to its September launch of Missoni, another high-end fashion designer, Carter said. The Missoni launch averaged about $40 per item and caused a shopping frenzy inside stores and online. That launch had no online quantity limit and may have led to the website's huge amount of traffic and eventual crash.

Target used the Wu line to test the limits, and could be thinking of adding quantity limits to retail stores for future launches, but Carter wouldn't confirm.

"We realize the consumer appetite has changed; I don't have specific details of future, but we are encouraged by this test of the online limitations," he said. "We had very positive feedback."

The ethics of scarcity tactics

Target is willing to disappoint customers for the buzz scalpers bring on eBay, said Bob Phibbs, retail consultant and "Retail Doctor." And that could backfire.

"These continuous scarcity ploys like Target, like Gilt, like Groupon and earlier H&M limited editions build resentment from customers," he said. "Target is feeding on this fascination from American shoppers trying to feel smart about buying things cheap. From extreme couponing to the Black Friday sales, these limited items offer those lucky enough to purchase, the chance to crow how 'smart' they were at getting there first — and, for those who purchased the line to resell on eBay, as 'smart' they purchased the items and can now jack up the prices."

Phibbs predicts that shoppers will soon grow tired of these ploys and move on to other shopping experiences.

"It seems Target's marketing is squarely focused on creating scarcity of items and legions of disappointed shoppers who, like some gambler going to the blackjack table, will come back again to see if they are a winner," he said. "The problem is now it is appearing that the game is fixed — the house is the only one who wins. While some hardcore fashionistas will continue to try to be winners, how long before shoppers shrug and say, 'Why bother?'"

Target doesn't see it that way.

"Target's goal is to make great design accessible for all, and yeah, we are disappointed about the amount available for resale," Carter said.

Target would not disclose how much revenue the Wu line has generated.

What do you think of Target's strategy? Is it a good retail practice? Talk about it in the comments below.

Topics: Consumer Behavior , Customer Experience , Department Stores , Marketing , Omnichannel / Multichannel , Retail - Apparel

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