Artificial Scarcity as Business Strategy: Pebble Looks Like Toeing That Line

July 13, 2013, By Sanjeev Ramachandran

Last week, when retailer Best Buy started selling the Pebble smartwatch, it became the first retailer chain to sell this high-end gadget.

Reports that tracked its sales suggested that within hours of its debut the device was in short supply. Even Best Buy website’s product page confirms that the device has been completely sold out. However, some critics have been complaining that the company is creating an artificial scarcity for the product in the market.

Going by what to Sarah Rotman Epps, a senior analyst at Forrester Research, says, the company, by creating an artificial scarcity for its product, is actually creating a hype about the device.

pebble

She explains that even high-end established companies and startups create such kind of artificial scarcity to their products so that they can calibrate demand for product. Often, this strategy has proved extremely effective, because people usually want to own what they cannot have.

For example, when Amazon introduced its Kindle tablet, they applied a similar strategy.

Amazon launched a limited edition of the device, before releasing the product for mass market.

Rotman Epps also adds that as a startup, Pebble may have introduced a limited number of the product so as to create such hype. But in her opinion, this kind of strategy may not succeed in the long-term. Because, once the product release into the market it will speak for itself. Therefore such kind of hype or artificial scarcity would not help the product to turn a success.

On the other end, addressing the issue, Pebble’s chief executive officer Eric Migicovsky denies the charge. Explaining this, he says that some individual stores received more products while a few others got a small number.

Although he refuses to comment on the exact number of products they shipped to Best Buy, he claims that Best Buy received the exact number of smartwatches they had ordered.

Right now, if you want to purchase a Pebble smartwatch, it is not possible, because it is already completely sold out form Best Buy website. Carly Morris, a member of the PR team at Best Buy confirmed that it has plans to stock the product again. But, no one at Best Buy has provided an exact date for availability of the smartwatch.

However, some of those who were managed to own a Pebble smartwatch have posted reviews about the product. Though a few have given five-star to the device, some others have complained about the fading screen and the delay in delivery. A few negative reviews suggest that after a few days of working the smartwatch’s battery turned completely dead.

The $150 Pebble smartwatch  is said to be one of the high tech devices that has been an inspiration for many tech firms such as Google, Apple and Samsung to think about a similar kind of wearable gadget and a few of them are currently working on wearable devices.

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