On October 18th, Apple's 6.3-by-6.3-inch Polishing Cloth hit the market for an eyebrow-raising $19. If you're like me, you're probably thinking "who would pay $19 for a piece of cloth?" As it turns out, a lot of people would.
Apple's Polishing Cloth has been a huge hit for the company, making it their most back-ordered product to date. If you were to place an order today, the earliest it would arrive on your doorstep is January 21st.
With all the attention this highfalutin piece of material has gained, it begs the question: What gives? According to Apple, the cloth is "made with soft, non-abrasive material" and "cleans any Apple display". That's it. No golden thread. No lotus silk. Not even cashmere. In fact, the company has remained all-too quiet on the actual material it's made from.
It's at this point we begin our departure from rational economics. It's a perfect case of the irrationality of human behavior in the marketplace.
But, I urge interested marketers to take a closer look. You'll quickly realize that it's not about the cloth. The cloth is just a front. Instead, what we're seeing here is an important lesson in human psychology. And when applied correctly, marketing and business leaders can utilize the same insights to drive brand loyalty in the most unsuspecting of ways.
Let's inspect. What is a cloth?
A cloth is ... a sense of collective identity.
We all have an image of ourselves, an understanding of who we are and where we fit into the world. This self-image is defined, in part, by the social groups we belong to. If you consider yourself an avid fan of a certain sports team, you're more likely to watch all their games, buy their merchandise and treat their wins and losses as your own. These are all things that strengthen your sense of self, and help you build important relationships.
The same applies to many Apple users. Apple isn't just a brand that they can buy high-tech products from - it's part of their identity. For them, buying an Apple product reaffirms their membership within the Apples elite community, providing them with a sense of belongingness and pride. This may explain why Apple's brand loyalty hit an all-time high this year of 92% and continues to grow despite many less expensive alternatives out there.
A cloth is ... a signal of reputation.
If you're the kind of person who likes to be careful with your money, the attraction to high-priced, luxury products may seem strange. Why spend $10,000 on a Rolex when you can spend $300 on a watch that's just as effective? The answer: self-esteem.
Many years ago, American economist Thorstein Veblen coined a term to describe this phenomenon called 'conspicuous consumption'. He noticed that some people would purchase goods in the marketplace because they were expensive. These products, known as Veblen goods, were a sign of prestige and high-status, attracting admiration from others. In this sense, people will pay 4x the price for a cloth in the hopes to attain the sense of pride, self-confidence and superiority that comes with it.
A cloth is ... a serious case of FOMO.
Social media is likely another culprit behind the success of Apples Polishing Cloth. While many people have a love-hate relationship with social media, one thing is for sure - it can lead to major FOMO (fear of missing out).
Unsurprisingly, people who were quick on the click to order the cloth before it sold out haven't been shy about posting photos of it online. The scarcity of this product has only made it more popular, making the people who flaunt it online worthy of envy. As you can imagine, many social media users would probably find $19 a reasonable amount to pay to alleviate their jealousy and provide them access to the latest social media trend.
A cloth is ... easily hidden at the checkout counter.
As humans, we react strongly to loss - especially when it involves money. A study found that anticipating spending money can activate pain processing regions in the brain.
One way that people can avoid feeling this psychological pain is by "masking the price". For instance, when speaking to The New York Times, Albert Lee (the director of a consulting firm in New York) acknowledged, "I just spent $4,000 on a laptop. What's another $19?"
Chances are, you can probably relate to this point of view. While the price of the cloth doesn't change, treating it as an "add on" to a more expensive suite of Apple products allows us to avoid feeling the true pain of our monetary loss.