Smart Marketing: Apple’s Planned Unavailability of the iPhone 5 Creates Cachet and Even Demand

Guest blog post by William D. Kickham

Everywhere you go, everyone is talking about the new Apple iPhone 5. Even more ubiquitous than talk of the phone’s technical upgrades, however, has been talk of how so many people can’t seem to get a hold of it. Seemingly no one is sure exactly how you can efficiently buy it and get it into your hot little hands.

More than 80% of Apple’s retail stores say they’re “out of stock.” Tried buying it online at Apple? Their website advises that the soonest you can get it online is “3-4 weeks” from date of ordering.

I’m Debbi’s husband Bill and I know firsthand about this experience. I have made several forays to our local Apple retail store in Dedham, Mass., to inquire about purchasing an iPhone 5. I have also made repeated phone calls to Apple’s sales support lines, as well as to AT&T. No one seems to know how to readily and efficiently get their hands on this much-hyped product.

Tired of online forms and phone lines, I went into the Dedham, Mass., Apple retail location, to see what solutions I might obtain there, given the fact that I can’t find availability for the phone seemingly anywhere in eastern Massachusetts. Because Debbi and I are departing for Maui, Hawaii for an extended trip on Saturday, October 20, that departure date does not allow for the 3-4 weeks Apple tells its iPhone5 customers it will take to deliver the product to your address.

What I was told at that Apple store was both completely unhelpful, inaccurate, and, frankly, doesn’t pass the smell test when it comes to honesty. I spoke with several employees of that store’s location, none of whom were especially helpful or provided accurate information. First, I was told by “Genius No. 1” (read: sales rep) that to solve this problem, I should “Just buy an iPhone 4S, then return it within 30 days and exchange it for an iPhone5 when they’re more available.” Not a smart move. Why? Because a second “genius” in that same store said that this would not be a good move, due to the fact that this exchange would apparently require that the phone essentially “go offline” for about four days or so as the old iPhone 4S was turned in, and new service was started up for a new iPhone5.

Yes, that led me to “Genius No.2,” from whom I asked when, pray tell, would that store receive its next shipment of iPhone 5’s, so that I could go in that morning and actually buy one that I could walk out with? The response (verbatim): “No retail store ever knows about this. No Apple manager is ever told when shipments are coming in, and even if we did know, we wouldn’t tell our customers.” Stunned at the shocking nature of both of those answers, I asked how it could be possible that Apple retail store managers would “never know” when product shipments and deliveries were being made. I was told (again, verbatim) “That’s just the way we work.” Oooh, now that’s secret – uber-secret; CIA-secret. Hmmm. When I pressed about an explanation for the equally-unbelievable second part of “Genius No. 2’s” answer – i.e., that even if Apple’s retail stores did know when shipments of the iPhone 5 were coming in, they “wouldn’t tell our customers,” I was told the following: “Because the store might get robbed.”

Stunned, I pointed out that millions of dollars of product were already in the store (and all Apple stores,) from desktops, to laptops, to tablets, to ipads, ipods, accessories and more — and Apple clearly isn’t afraid that any of those will be stolen. The response? “Well, that’s the way Apple does it.” Uh-huh.

Hoping that three times might be the charm, I proceeded to “Genius No. 3,” and what advice did same have for me? Again, this is verbatim: “Buying the iPhone 5 is like buying tickets to a rock concert. You have to either camp out at a retail location just before the tickets go on sale, or buy them online at very strategic dates and times.” After learning that I had already tried to buy the phone at Apple’s online store repeatedly, selecting the “Pick Up At Retail Store” option, “Genius No. 3” asked me what time of day I had tried ordering online, since Apple instructs their online customers to do this between 10:00 PM and 4:00 AM EDT. I told him that I tried three times between 11:00 PM and midnight.

“Well, that’s the problem,” Genius No. 3 intoned. “As I told you, getting this phone is like buying tickets to a rock concert. You can’t just order it any time between 10:00 PM and 4:00 AM” – even though Apple’s website says you can. “You have to go to the site around 9:50 or 9:55 PM, go through the ordering process, and be ready to “Proceed To Checkout” at exactly 10:01 PM EDT. Then, when you complete your order and select a retail location to pick up the phone at the next day, you won’t see “Unavailable At This Location” when you are at the Checkout page of your purchase. That’s because Apple updates its retail availability as of exactly 10:00 PM EDT, and if you’re online and lucky, there’ll be an iPhone 5 that you can reserve for pick-up.”

You know how this story ends. Yes, I went online at 9:55 PM, filled out everything, and tried to purchase at 10:01 PM EDT. And 10:02 PM. And 10:05 PM, and 10:15 PM. Result each time: “Unavailable For Pickup.”

Driving home, it occurred to me: The massive, prolonged unavailability of this product is all really about just one thing: Planned Product Demand. It’s the opposite of Planned Obsolescence.

Think about it: Making this (or any) new product unavailable following fever-pitch buzz generated by the manufacturer (key to the marketing strategy,) creates the product’s own cachet – and perpetuates consumer demand. If the product is everywhere and easy to get, there is no public perception that the product is very popular and a “have-to-have” item. But if millions of people are talking about it, yet it’s extremely hard to actually get, that fact becomes an self-perpetuating buzz, generating even more demand. Similar to a successful political campaign creating an “aura of inevitability” about the candidate winning, this is a successful MARKETING campaign creating a similar “aura of Unavailability” that gets people to want the product more. This method of artificially restricting the supply of the product in retail stores, and forcing “wanna haves” to line up online to buy one, is just like buying Bruce Springsteen concert tickets. It makes you feel that you have to time your “score” just right, just perfectly, as though you were camping out by Boston’s TD Garden waiting for tickets to go on sale. And what does this really do? Create cachet. Create an aura of “unavailability” about the product, due to “overwhelming consumer demand” that makes people want the product all the more.

The technical engineers at Apple are essentially mathematicians, so let’s put this in an equation: Hyper-buzz + restricting supply = product demand.

Let’s face it – if the new iPhone 5 was readily available in huge quantities in all stores, the blasé public might – rightfully – believe – “Oh well, I can purchase it at any time. There’s no rush. And people aren’t exactly lining up to get it.”

But the product unavailability witnessed by the iphone5 creates an increased demand for the product.

There;s nothing at all illegal about this tactic. But it doesn’t place new customer satisfaction at the top of Apple’s list.
Not very considerate to the customer.

But I’ll admit it’s smart marketing indeed.

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