The phrase Promo FOMO – short for ‘promotional fear of missing out’ – refers to the anxiety some consumers experience regarding impulse buying. It taps into people’s natural desire to seize an amazing deal and their fear of missing out on limited-time offers.
Understanding the impact Promo FOMO can have on a shopper’s psyche is crucial. It isn’t just about creating a buzz but tapping into deep-seated fears and desires. Social media already amplifies these emotions, so retailers need to proceed with caution.
The phenomenon that is Promo FOMO
A recent study by Professor Sajjad Hussain et al at the Riphah International University in Pakistan explores the relationship between FOMO and anxiety, materialism, and compulsive buying behavior.
While the concept of FOMO has been around for decades, the phenomenon is largely linked to social media usage, since these platforms “can be perceived as decreasing the barriers to social participation, thereby facilitating the maintenance of connections for individuals who experience FOMO.”
Hussain says compulsive buying arises when netizens “make impulsive purchases to keep up with their peers or avoid the FOMO on perceived opportunities. He adds: “The circumstances may result in monetary strain, indebtedness on credit cards, and discontentment with one’s life.”
How retailers capitalize on Promo FOMO
Retailers have hopped onto the trend by creating exclusivity or scarcity with time-sensitive opportunities. By creating a sense of urgency, brands tap into a shopper’s compulsive buying behavior, nudging them to take immediate action.
A report by Eventbrite took a deeper dive into the data, finding that nearly 7 in 10 millennials experience FOMO. This drives approximately 60% of millennials to make impulsive purchases. But millennials aren’t the only ones driven by this phenomenon.
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According to Dr. Chris Hodkinson, a senior lecturer at the University of Queensland Business School, this type of marketing “is essential, no matter what age group or location you’re targeting.”
He suggests the following key strategies:
- Exclusive access and VIP memberships: Products and services created for customers to foster loyalty and a sense of exclusivity.
- Flash sales and limited-time offers: Businesses can create a sense of urgency and encourage immediate purchase decisions.
- User-generated content (UGC): Showcase customer experiences and testimonials to build trust.
- Influencer collaborations: Partner with influencers to promote products and events.
Case study: Dr. Hodkinson uses Booking.com as an example of Promo FOMO done right. A red banner will appear once a property is sold out, with the text: ‘Sorry, this property is sold out. Your dates are popular and we’ve run out of availability. Are you flexible?’
Booking.com also indicates when a room or unit is in high demand, usually with a catchy banner that reads, ‘In high demand! Only 2 rooms left on our site!’ This strategy prompts travelers to jump at the opportunity or risk losing the room.
Ethical considerations of Promo FOMO
Are there ethical considerations when deploying Promo FOMO strategies? Dr Hodkinson says it is important to set realistic expectations.
Remember: Promo FOMO triggers an emotional response in shoppers, designed to influence their decision-making and drive impulsive spending. This might result in a negative experience for some consumers.
When deployed successfully, these strategies could add value to a shopper’s online experience. By consistently offering high-quality, south-after products, consumers would benefit from these impulse buys, instead of feeling like they’ve been taken advantage of.
It could also build brand loyalty, especially when retailers are serious about creating a sense of allegiance and anticipation among their loyal customers.
Lark, a SaaS company for workplace productivity, sets it out succinctly: “Authentic FOMO is driven by genuine scarcity and exclusivity; it cannot be simulated through contrived messaging alone.”
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About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
