When you buy Loot Crate, you aren’t buying stuff. You are buying intangible, subjective experiences. The most notable of these must be the experience of getting a pleasant surprise each month. What’s in the box is merely the vehicle used to deliver the surprise, delight, feelings of exclusivity, and all those other experiences. Amazingly clever when you consider that people could basically pay Loot Crate to include their book/game/pop-culture thing/whatever in the package. Add an element of gambling – random crates contain extra-valuable goodies – and you have a model that is almost irresistible.
There is research into relationships between dopamine in the brain and novel experiences (both having and seeking), gambling, and gaming. I can’t begin to asses these findings here – not lease because I’m not a cognitive neuroscientist or behavioral psychologist. (And before anyone starts an argument about dopamine and video-game addiction, I know that some of this research is considered to be controversial – I’m not endorsing it either way.) But imagine that there is a link. We have a business that sells novel experiences (with just a hint of gambling) to gamers – who may already have elevated levels of dopamine, which may make their subjective experiences of novelty and gambling pay-off stronger than it would be otherwise. Viewed in this light, Loot Crate’s success is hardly a surprise.
In a time when consumers in parts of the developed world seem to be buying less stuff, this business model keeps the stuff going out to consumers by tying it to the experience of novelty – something missing from the more traditional forms of shopping.
This connection of a physical product to an intangible experience or feeling isn’t new. After all, Charles Revson, one of the founders of Revlon, is credited with saying: “In the factory, we make cosmetics. In the drug store, we sell hope.”
Is this method of marketing morally or ethically problematic? That depends how you look at it, and is a conversation for another day. Whatever the case, it will be interesting to see if this business model can be sustained over time, especially if the novelty required by consumers escalates over time.