Information Cascades, FOMO, and Sold Out Products
https://www.smashingmagazine.com/2019/11/fomo-increase-conversions/
In this magazine article, Scacca describes ways to positively utilize FOMO (Fear of Missing Out) when designing digital applications. Specifically, she discusses sold out products, and why online retailers should display these products on their sites, even thought they are out of stock. There are two big reasons why displaying sold out products leads to a positive economic payoff for retailers. Firstly, showing such products leads to a feeling of immediacy for the users. Customers will feel pressure to buy products that they are looking at, in fear that they will sell out just like the other products. More specifically to this class, an information cascade is also formed when sold out products are displayed. Consumers will feel that if a product is sold out, then it must have been a good product or else nobody would buy it. Therefore, consumers are motivated to buy similar products that area available.
While reading this article, I also of another marketing tactic that many online retailers use to increase profit, which can be attributed to information cascades. Many websites indicate next to the item whether it is a popular or “top rated” product. This feature acts in a similar way to that of displaying sold out products. When users see that a product is highly rated, they are more likely to think that it is worth buying, as if other people like the product, it is probably very good and worth buying.
I think that this article was very interesting and relevant to read, as concepts learned in Networks truly do affect all aspects of our lives, from buying behavior to marketing strategies, and everything in between.