02/26/2007

Scarcity and Exclusivity Online

Velvetrope Web-centric companies like Organic spend a lot of digital ink chronicling the ways that the Internet is driving cultural change.  Social networking in particular is a unique web phenomenon that has  profound implications for the way that modern humans interact with one another.

But after a vacation spent entirely offline, I've had a chance to think about the way that the web can simply reflect rather than drive popular culture.

A great example is product scarcity.  (Forced) exclusivity is an important trend in traditional retailing that is finding expression online, which is ironic since the promise of the web is normally about ubiquity and ready access of products and services.  Invitation-only Gmail was one of the first web-only services to break this rule.

But among hip-hop brands, particularly high-end sneakers and clothing, limited runs are standard.  At the Adidas Originals Store in Soho, for example, retailers hang up an article of clothing on a chalkboard and keep a running total of how many were sold and how many are left in stock.

And next month, New York's sneaker and sportswear pilgrimage site Training Camp will open the Complex Platinum Club inside the store.  A joint venture between Training Camp and Complex magazine, the store will sell limited-edition sneakers, cellphones, and other street status items to celebrities and tastemakers who qualify for VIP status.

The web's response is Privé, an invitation-only section of Forzieri.com, an online purveyor of luxury fashion goods.  Forzieri's best customers will have access to exclusives and limited editions of designer merchandise.  "It's like going to a popular night club," said founder Andrea Forzieri.  "When the bouncer refuses you entry, you want more than anything to get in."

I'm undecided about whether this is a good thing or a bad thing, but it's clearly a countervailing trend online that borrows from the offline world.  And are there other great examples of online exclusivity out there? 

[Photo credit: gillianleigh]

Misha Cornes

TrackBack

TrackBack URL for this entry:
http://threeminds.organic.com/cgi-bin/movabletype/mt-tb.cgi/2096

Comments (4)

Jay:

IMHO the prolonged 'beta' periods for web services are another example. Google services' (orkut, gmail, etc) beta phases are less a part of a software dev process (IMHO) and more a cycle to generate a critical mass of 'insiders' with exclusive access.

That generates wider demand among an audience associated directly or indirectly with these influencers/early adopters.

Shawn:

Some well-known but exclusive social networks (Facebook, Doostang) and dating websites (j-date,SquareDating) come to mind. These don't represent retail or marketing strategies, but they're worth mentioning. The web is fertile ground for intentional communities that organically (sorry) spring up around ideologies or interests. To define a community or market from the top down, so to speak, seems antithetical to the Web's spirit and purpose, but it makes sens as a reflection of our basic sociology.

A Small World (http://www.asmallworld.net) is another high-end exclusive social network that has been around for several years. I saw a presentation from their CEO the other day, and he said the average income of their user base is $150,000. They hand-pick their advertisers who are high-end luxury brands (NetJets, Moët & Chandon, etc.). It could be that the exclusivity is more desirable to these types of brands, as they are actually reaching an audience who has the money to purchase their high-priced items.

I agree Shawn, the social networks pose some interesting questions when it comes to "exclusivity". For communities that have "friends" or "connections" such as Facebook or LinkedIn, will that feeling of exclusivity be sustained as more users join? If I have 1000 friends, isn't it a little less meaningful than when I had 100? How will an overabundance of users keep from turning into "Privé for everyone"?

Perhaps the meaning of a "friend" or a "connection" online will come to reflect their real-world counterparts, where over time, certain contacts are more important than others.

Post a comment


Type the characters you see in the picture above.