Festive FOMO: Psychology Behind Balancing Urgency With Value

In the maze of India's festive season, where tradition meets technology, brands have mastered the art of creating desire through scarcity. This year's festive sales, which recorded Rs 1 lakh crore in online transactions, tell a compelling story of how FOMO (Fear of Missing Out) has become a powerful catalyst in consumer behaviour today.

Number Game
The festival season witnessed a 23 per cent growth in online sales compared to last year, according to Datum Intelligence. The first week alone saw transactions worth Rs 55,000 crore during Flipkart's Big Billion Days and Amazon's Great Indian Festival, highlighting how effectively these platforms have mastered the art of creating shopping urgency.

But beneath these impressive numbers lies a complex web of psychological tactics that marketers employ to drive consumer behaviour. "FOMO-based marketing can indeed lead to higher rates of return and buyer's remorse. The real cost of these tactics extends beyond immediate sales. When you consider customer lifetime value and brand reputation, the stakes become even higher," notes HS Bhatia, Managing Director of Daewoo India. "

Evolution Of Urgency
Brands are moving beyond simple countdown timers and limited-stock warnings to create more sophisticated urgency triggers. The integration of artificial intelligence is reshaping how brands approach festive FOMO. "By analysing consumer behaviour and preferences, we can tailor offers that resonate with individual shoppers, significantly enhancing conversion rates," Bhatia explains, highlighting how AI is helping create more targeted and effective urgency.

This year's data reveals an interesting trend - while smartphones emerged as the leading category with online purchases accounting for nearly 65 per cent of all sales, the pattern of consumption has shifted.

Flipkart reported that "Premium and mid-premium Android smartphones saw robust growth, with high interest in artificial intelligence (AI)-led features," while noting a 17 per cent year-on-year rise in demand for top brands.

Premium and mid-premium Android smartphones witnessed growth with high interest in AI-led features, indicating that consumers are making more considered purchases despite the FOMO factor.

New Rules Of Engagement
For brands like True Elements, the approach to festive marketing is becoming more nuanced. "During festivities, even the channels prioritise all things indulgences. There's always an inclination to go out, get that extra thing, buy that extra phone, get that new TV... where there's a slight bit of premiumness attached to it," says Akhil Menon, AVP of Brand and Growth at True Elements.

The rise of quick commerce has fundamentally altered how brands approach festive marketing. "Getting things in 10 minutes in quick commerce, that's been a game changer," Menon explains. Instant gratification has created new patterns of consumption, where the act of celebrating itself has become a social media performance.

However, Menon points out a shift in consumer behaviour stating, "Nobody in, at least in grocery as a category, people have stopped responding to flash sales. Because they know here first seven days of the month I'm gonna get very nice offers across all platforms."

The rise of social commerce has added another layer to festive FOMO. "It's important to show that I'm having a festive time myself. You should be able to put up an aesthetic story or a snap or a picture of a great Diwali that you're celebrating," Menon observes.

The social aspect has transformed how brands approach their festive offerings, particularly in categories like gifting. "It's more important to show the distinctiveness of your hamper versus someone else's rather than just talking about it," Menon adds, highlighting how packaging and presentation have become crucial elements in the festive marketing mix.

The Sustainability Question
As consumption patterns evolve, brands are grappling with the challenge of balancing urgent buying triggers with sustainable practices. True Elements, for instance, has moved from plastic packaging to reusable tins and offers recycling programs for customers. "We've tried to bring all of that modernity together at the same time we went back to our own essence," explains Menon.

As the festive season continues, the challenge for brands will be to create urgency without compromising on value and trust. The success of this year's festive sales suggests that while FOMO remains a powerful marketing tool, consumers are becoming more discerning in how they respond to it.

The data from non-metro cities, which accounted for over 85 per cent of Amazon's customers this season, indicates that the next frontier of festive FOMO marketing will need to balance urban sophistication with tier-two sensibilities. As Bhatia concludes, "Striking a balance between creating urgency and offering genuine value is crucial for nurturing long-term relationships rather than just driving one-off sales. While urgency can boost initial purchases, ensuring that products meet customer expectations is essential for nurturing long-term relationships rather than just driving one-off sales."

Reema Bhaduri

BW Reporters The author is the Editorial Lead at BW Businessworld. Majorly writes on marketing, advertising, experiential marketing and retail. She closely looks upon the vertical of BW Marketing World and BW Retail World.