The Effect of Shelf-Based Scarcity on Consumer’ Choices

Abstract

Today, Saudi Arabia has a very competitive market: therefore, understanding the effect of different marketing tactics is essential. Saudi Arabia's startup funding has drastically increased in 2022 and is continuing to grow more than 20 times in five years to reach $1.2 billion (Saudi Arabia to Grow at Fastest Pace in a Decade, 2022). Shelf-based scarcity in the form of relative stocking level depletion significantly affects consumer preferences (van Herpen et al. 2009). Previous studies found that shelf-based scarcity drives consumers to draw inferences that the scarcer alternative is both more popular and of higher quality. This article tests this theory out in the scope of Saudi Arabia. In addition, a long stream of previous studies found that Scarcity tends to impact preferences only for desirable goods and when consumers believe that scarcity was caused by market forces and not accidental or non-market such as a missed delivery (see, e.g., Verhallen 1982). Demand-driven scarcity is implied by product popularity increasing the product's value and preference. Product exclusivity and uniqueness are attributed to supply-driven scarcity, satisfying consumers' need for uniqueness and desire to display social status . Many retailers and merchandisers don’t understand the importance of the shelves in their markets how to leverage them and their effects on consumers’ behavior. In addition, not enough research is done on shelf-based scarcity in Saudi Arabia. This article addresses these problems to successfully guide retailers and merchandisers to arrange their shelves in a way that will affect their in-store customers in positively. This research used a quantitative approach because it’s more efficient. The target population were people living in Saudi Arabia. Data was collected through an online survey method since its convenient and easy. The survey was used to test out the effect of shelf-based scarcity alone excluding any other factors that may affect consumers choice such as price and brand name. The survey link was randomly sent to residents in Saudi Arabia. SPSS software and the one-way ANOVA test was used for analyzing the collected data. This paper suggests that shelf-based scarcity shouldn’t be used as a marketing tactic in Saudi as consumers believe it’s a non-market force and won’t affect their perception of quality nor popularity. The study’s result suggest that Saudi consumers believe that scarcity is caused by non-market; Therefore, shelf-based scarcity negatively affects Saudi consumers.