Marketing Lessons from the Beach
By Dr. John Story–I am sometimes amazed at what I can learn during a day at the beach. Watching crowds of people walk down the beach collecting shells reminded me of some of the challenges of marketing. In particular, I thought about what I call the curse of abundance.
(https://theresagreen2.wordpress.com/sotogrande/paraje-natural-lagoon-beach-guadiaro-estuary/the-reserve-in-december/)
COCKLE SHELLS
Cockle shells can be found scattered across almost any beach in Texas. For that matter, they can be found on beaches around the world. They are attractively shaped, appear in a variety of sizes, and are durable enough that most you find are still perfect and unbroken. What is most interesting about them is that almost no one collects them in their buckets. People pick them up, remark on their attractiveness, and then put them back in the sand. The shells that you find in people’s buckets are typically the rarer varieties. I stopped and talked to a few casual collectors and admired their shells. They had whelks, augers, a few tigers’ eyes, and the occasional wentletrap. Almost none of them had cockle shells in their buckets. I was carrying a colorful example of a cockle shell and would show it to them and ask why they weren’t collecting them. Some version of, “there are too many of them,” was the most common answer.
ABUNDANCE
I have brought specimens of cockle shells into the classroom and asked students what they thought about them and whether they would like to have one. The response is nearly always positive, with people commenting on how attractive the shape is, or how nice the color. Yet, on the beach, where they are abundant and free, they are seldom collected. When I first noticed this, I dismissed it simple supply-and-demand effects, that the supply exceeds the demand. But on further reflection, I realized that this was more complex, that with sufficient supply of these shells demand dropped to near zero. With sufficient abundance, people perceived them as undesirable. I have often seen people add a few to their buckets as they start down the beach and then take them out to make room for “better” shells later on, as they realized how many cockle shells there were. Simply seeing so many more of them made them reevaluate their desirability.
I truly believe that if there were only 50 cockle shells on Galveston beach, each one found would be treasured and kept. Since there appear to be more on the order of 50,000, or even 500,000, they are casually cast aside.
MARKETING LESSONS
The marketing lesson here is that there is a tipping point in the relationship between abundance and demand (see Malcolm Gladwell’s book for more on tipping points). As marketers attempt to penetrate markets and make products readily available, they also increase the perceived abundance and reduce perceived rarity of their offering. As with the cockle shell, there is more at work than simple supply-and-demand. When the desirability of your offering is a function of it being exclusive, simply making it more available can make people want it less. The challenge is to balance ease of purchase and market share against exclusivity, so that owning your product is still at least somewhat special. Marketers want to sell more of their products, but there is a point at which too much success drives the down perceived value. If it seems like everyone has one, the product just isn’t special any longer. This curse of abundance has been the bane of many luxury brands whose managers expanded distribution and lowered prices until they just were not luxurious anymore. They can reach the point that the target segment won’t be seen in public wearing the brand, because it’s just too common.
The most collected shells on the beach were common enough that almost everyone could find a few specimens, but rare enough that you had to search for them. These included tiger eyes, baby ears, whelks, and the occasional lettered olive. I don’t think they were any more attractive than a nice cockle shell, but they had the simple advantage of being a little harder to come by.
So, I brought away two lessons from my day at the beach. First, you can learn about business by observing and analyzing behaviors in almost any context. Second, you don’t want to be the cockle shell of the retail stores.
Associate Professor of Management & Marketing – UST