It’s 7am in the morning in New York City, we trudge through 10 centimetres of snow to join the queue. It stands at ~100 persons long. We are told it will take 4 hours before we get inside.
The object we desire ? The Cronut™ at Dominique Ansel Bakery.
What’s a Cronut ?
Literally the marriage between a croissant and a doughnut. See Cronut 101.
Simple when you boil it down to its core ingredients – pastry, cream and sugar.
Yet, what makes the 100 odd queue from all walks of life: locals & tourists alike,mothers with prams,my wife who was 4 months pregnant (her idea, not mine), willing to put up with sub zero temperatures and 4 hour long queues just for pastry ?
To understand the desire for
the Cronut™, let’s examine its attributes:
- Dominique Ansel created the Cronut™ in 2013, trademarked and unique
- The bakery produces only 350 Cronuts™ per day, limited to 2 per customer
- Every month entails a different unique flavour and don’t expect plain vanilla to be an option. Examples:- Blackberry Lime,Peanut Butter Rum ,Strawberry Balsamic
- USD 5 a Cronut
Rational exuberance or irrational desire ?
We have seen queues before, it’s not unique to the Cronut™ adventure.
What I find interesting for “rational” consumers is the price they are willing to pay vs the price they are actually paying – the Cronut is $5 a piece (piece of cake excuse the pun) but the price was in addition to waiting in a 4 hour long queue -every day there is a queue,no exception !
Scarcity drives increased value perception.
In Commodity Theory (Brock,1968) surmised that the impact of scarcity (real / perceived) can inflate the value of the commodity. Because there is limited availability of 350 Cronuts™ per day and a maximum 2 per customer, the value perceived by the crowd surpasses the price and the inconvenience of the queue.
Furthermore, research by Worchel et al 1975 demonstrated in the cookie jar experiment that in a jar with 2 cookies (due to supply scarcity) vs in a jar with 10 cookies – the participants rated the jar with 2 cookies higher, even though they were identical chocolate chip cookies !
In the Cronut™ adventure the cookie jar scenario is not like for like because every month the Cronut™ flavours are unique and once off, thus I would argue the perceived value is even higher – it is not the same chocolate chip cookie every month!
Scarcity has been used effectively in driving consumer demand.
My other observed examples:
- Hermès Birkin bag, > $10,000 a piece, month long waiting lists are common
- Pop Up stores, here today, gone tomorrow , recently the In-N-Out Sydney burger pop up which sold out hours after opening
- Aldi Special Buys – weekly specials from toys to Ottomans, with demand often outstripping supply before the end of the week.
My reflection on the Cronut ™ adventure: From a consumer behaviour standpoint, it was totally rational for the folks in the queue , because this is a segment of the market who values the uniqueness of the pastry AND the scarcity of it.
So how good did it taste ?
My 1st piece was awesome, sinking into the soft pastry and letting the cream fill my mouth. Maybe queuing 4 hours and a reduced core temperature does that to you.
My 2nd piece, I felt my risk of diabetes going up and could have sworn I felt a tooth cavity forming instantly.Diminishing marginal utility occurring.
Whilst scarcity theory influenced us , it was YOLO (You’ll Only Live Once) that motivated us:-
We were on our inaugural trip to NYC and how else when you look back, can one say one has queued up for 4 hours for pastry ?
Don’t let my reaction sway you, after all if folks at Dunkin Donuts (called the Croissant
Doughnut),Rinkoff Bakery London (Crodough)and South Korea ( the NYC Pie) all want a piece of it, they all must be on to something right?
Brock, T. C 1968,Implications of commodity theory for value change, Academic Dress,NY
Worchel,S et al 1975, Effects of Supply and Demand on Ratings of Object Value, Journal of Personality and Social Sciences, Vol 32, No 5