How the Effects of FOMO Influences Canadian Consumers

Matthew Pramberger
Capilano University School of Business
BADM 460: Business and Society Research Project
Dr. Laurie Prange
April 11, 2025

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Table of Contents

Abstract ............................................................................................................................................ 1
Introduction ...................................................................................................................................... 2
Methodology .................................................................................................................................... 3
The Systematic Literature Review Process ................................................................................... 3
Procedure ................................................................................................................................... 3
Findings ............................................................................................................................................ 4
Monetary Statistics ..................................................................................................................... 4
Effects of FOMO on In-Person Experiences .................................................................................. 6
The Digital Space ......................................................................................................................... 8
Artificial Scarcity ....................................................................................................................... 10
Where FOMO May be Used in the Future .................................................................................. 10
Limitations ...................................................................................................................................... 12
Conclusion ...................................................................................................................................... 12
References ...................................................................................................................................... 13

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Abstract
This research report looks at the psychological phenomenon of the fear of missing out (also known
as FOMO) and how it is effectively used by businesses to influence consumer purchasing decisions.
Focusing on Canadian consumers, this study investigates whether these marketing strategies are
becoming less effective over time, particularly when faced with changing consumer behaviour trends
and economic conditions. Through a systematic literature review backed by statistical data and
secondary sources, this report analyses both physical and digital implementations of FOMO tactics,
ranging from limited-time retail offers to predatory monetization models in video games. It also
considers the ethical concerns of related strategies like artificial scarcity and anticipates how
advancing technologies like neuromarketing and AI may shape future FOMO-based marketing. While
consumer awareness and frugal spending habits appear to be on the rise, the findings suggest that
FOMO tactics remain effective, so long as they adapt to shifting consumer behaviour. In the end, this
report concludes that Canadian consumers are not necessarily becoming less responsive to FOMOinducing strategies overall; instead, the success of these tactics depends on how effectively they
keep up with the rapidly changing consumer trends.

Introduction
The fear of missing out, also known as “FOMO,” is a psychological phenomenon where
someone becomes anxious over the idea of being left out of an experience or opportunity.
Businesses take advantage of this response to manipulate their customers into making purchases
that they otherwise would not have, leading to an increase in repeat purchases and customer
retention. Companies will use FOMO to sell both digital and physical products and services, primarily
through the use of limited-time offers. Common examples of this are sales/discounts at a retail
store, bringing back a limited-time menu item at a restaurant, or having a digital store where items

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rotate daily in a video game. From personal experience, it feels as though this practice has become
more and more common, and due to over exposure, I have become less susceptible to the influence
of FOMO. Even though I feel less of a response to it, it seems like it is only becoming a more popular
tactic among businesses. This research report aims to analyse current consumer trends to see if
FOMO tactics are in fact becoming less effective on Canadian consumers, and if so, by how much.

Methodology
The Systematic Literature Review Process
The literature review process is used as the primary part of the methodology, as it is
effective at gathering information pertaining to this topic. On top of that, it will be used to ensure
that research is structured, documented, and evidence based. Initial research into consumer
behaviour and “FOMO” will come from online databases, most notably Business Source Ultimate
and Google Scholar. This initial research will be backed up by statistics gathered from reputable
websites such as Statista and will be supported from insights provided by relevant books and news
articles.

Procedure
The strategies used to search for this research report include keyword searching, citation
chaining, and concept chaining. Keyword searching is the act of searching databases using specific
words and phrases that are relevant to the research topic in order to find high-quality articles and
sources. For this report, Business Source Ultimate was the database where keyword searching was
most heavily used, and to a lesser extent Google Scholar. Citation chaining is the act of using works

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referred to in relevant articles in order to find even more of them. This also works in the reverse
scenario, where someone looks to find other articles that used the initial one as a source of
information. Concept building, similar to keyword searching, is used to search databases, but it
instead uses key concepts of the research question to find relevant terms and synonyms.

Findings
Research on consumer behaviour is ever changing. The trends have been rapidly evolving, especially
in the digital space (Alexandru and Andrei-Dorian, 2024), which has made it difficult for researchers
to make concrete statements about how consumer behaviour has evolved and how it will continue
to be shaped. In fact, some researchers say that studies and tests have not adequately tested how
common FOMO tactics affect consumers (Good and Hyman, 2020). Even if not enough studies have
been conducted on FOMO with a consumer behaviour perspective, there are still plenty of bits of
information that can be tied together to paint an outline of current trends. Starting off, looking at
related graphs from Statista is able to give insights into what Canadian consumers are doing with
their money.

Monetary Statistics

Figure 1

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This graph from Statista demonstrates the perceived inflation rate of Canadians based on
their yearly income. It would appear that historically, those with a lower source of income believed
that inflation is higher than those with higher wages. The main anomaly shown ranges from Q2 2021
to Q4 2022, where perceived inflation was nearly equal for all income brackets shown. In reality, this
period of time did experience high inflation rates, which is likely the cause of this. Looking at it in the
more recent quarters, people with lower incomes have again begun to perceive inflation as being
higher than those that are wealthier. This means that based on their yearly income and their idea of
the value of money, one may assume that they are less likely to fall victim to FOMO tactics, as on
paper they are less likely to spend unnecessarily. However, 75% of people aged 18-30 are more likely
to impulsively buy a product if they receive a discount on it; and people with lower incomes tend to
be younger in age, which means that people with less income are, in some cases, more susceptible
to FOMO strategies (Alexandru and Andrei-Dorian, 2024).

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Figure 2

The above graph, also created by Statista, highlights the percentage of Canadians who are
willing to spend more on brands that they know and love. Since 2020, that number has been on the
decline, dropping by 9% in 2 years. This may highlight a trend where consumers are spending more
frugally than in years past. This makes FOMO incentives that have to do with price reductions, buy
one get one free deals, or similar more enticing to Canadians (Fucia and Serban, 2024). Even though
Canadians are becoming more and more unwilling to spend more on their preferred brands, brand
loyalty and repeat purchases drive a massive amount of revenue for businesses (Chauhan, 2023).

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Effects of FOMO on In-Person Experiences
Table A
Scale

Item

Factor

t-value

Loading

Fear of Missing Out (FOMO) (α = .944)

If I do not go to this concert...

I'm afraid later I will feel sorry I did not go with my friends

0.772

16.987

I will worry about what I'm missing

0.803

18.510

I will worry my friends are doing more rewarding things

0.891

22.460

0.889

—a

I will feel left out

0.814

18.806

I will feel sorry I did not experience an event with friends

0.805

18.206

I will feel anxious about not being with my friends

0.820

19.074

I will feel bothered that I missed an opportunity to be

0.802

18.183

N/A

N/A

0.855

19.984

than me

I will feel concerned my friends are having more fun
without me

with friends

Purchase Likelihood (PL)

On a scale of 0–10, what is the chance you would buy the
ticket and go to the concert?

Anticipated Elation (AE) (α = .911)

When considering this experience...

I expect I would feel elated

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Self-enhancement (SE) (α = .918)

I anticipate I would feel excited

0.903

23.081

I would feel exhilarated

0.890

—a

I expect I would feel happy about going

0.771

16.452

I think that others would like me if I go

0.822

20.372

I think that going would create a good impression of me

0.941

—a

My going would result in others' positive attitudes toward

0.902

24.887

I would be sorry I spent the money

0.860

14.997

I would be sorry because I should save money

0.915

16.222

I would be sorry I did not spend the money on necessities

—

—

me

Anticipated Expense Regret (AER) (α = .942)

The above table is made from data that was gathered by Good and Hyman, 2024. It is
gathered from a survey where participants, on a scale of 1-7, said how strongly they agree/disagree
with each statement in the middle column. The questions have to do with FOMO surrounding a
concert experience. The closer the factor loading is to 1, the more likely that statement is to be true,
with the t-value supporting the validity of each claim. The higher the t-value is, the more likely the
factor loading number is to be true. The sample consisted of 295 Americans. Looking at the chart, it
would seem as though FOMO tactics are very effective at making people feel a plethora of emotions,
both positive and negative. However, it would seem as though the information gathered here both
supports and contradicts previous research (Good and Hyman, 2024). This contradictory nature

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found throughout consumer behaviour research on FOMO’s influence on consumers has led there to
be some dissent about whether or not previous research has properly tested customer feedback to
FOMO marketing strategies (Good and Hyman, 2024).

The Digital Space
Pivoting into the digital space, manipulative consumer behaviour tactics become much more
prominent, with some businesses relying on overtly predatory revenue models. One of the most
lucrative of these is the gacha system. Originally, a gacha is a version of a vending machine that is
often filled with small toys or collectibles of some kind. But instead of having the customer pick out
what they want, they were given a random item out of a small selection. Move that concept into the
gaming realm, and now companies offer their game for free, but will charge their customers for a
small chance of getting an item or character that they want (Jianqing and Singh, 2023). The top
games in this industry are making upwards of $200 million USD quarterly each. This amount of
revenue outpaces most traditional freemium modelled games and paid games (Jianqing and Singh,
2023). Because of the random nature of getting the in-game items and due to the fact that many are
limited-time offers, players will often go to various websites, forums, and social media platforms to
boast and show off the new item they got. The community engagement and encouragement on
these platforms helps to further drive the fuel for the revenue system, but it is hard to judge to what
extent (Jiangqing and Singh, 2023).

When looking at the larger picture, it would appear that Combining a gambling-like profit
model with FOMO-driven offers creates one of the most efficient monetization systems for video
games (Jiangqing and Singh, 2023). Companies that use gacha mechanics in their games are able to
get past many gambling laws due to the fact that the customer is technically paying for an item, just
likely not the one they actually want. Though this raises the question: do customers view different

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revenue models as more ethical than others? When looking at the general online space, customers
perceive companies that place advertisements on their platform as less ethical than those that
charge a fee (Su and Jin, 2022). Research also points to having the option to skip an ad did little to
change the opinion of users, with them still seeing paid services in a more positive light (Su and Jin,
2022). In the iOS App Store, paid apps are viewed as the most legitimate, with users having few
concerns over privacy. Freemium apps are viewed with more scepticism than paid apps, but they are
still seen more positively than free apps (van Angeren et al., 2022). This raises more questions: how
are FOMO-inducing strategies viewed by the public? What are other strategies related to FOMO that
may be viewed as unethical?

Artificial Scarcity
One tactic that is related to FOMO strategies is artificial scarcity. The classic way this is done
is to introduce a slow feed of a product/service in order to make its perceived value go up (Bradley,
2023). Like FOMO-creating tactics, especially in the digital realm, artificial scarcity uses societal
influence and an otherwise unnecessary “buy now!” pressure to keep a company/industry’s supply
and demand at the most profitable level, even if the product or service is not actually that rare.
(Bradley, 2023). There has been much ethical concern about the implementation of artificial scarcity
in various industries (Bradley, 2023), and it would not be surprising if this awareness permeates
throughout more manipulative consumer behaviour tactics, such as FOMO.

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Where FOMO May be Used in the Future
As technology becomes more advanced, there will be new ways to sell to consumers. One
proposed way is neuromarketing (Patik, 2024). By using an eye-tracking tool, one study was able to
show where and how long participants looked at specific points on a screen.

Figure 3

(Patik, 2024)

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The website with the heatmap on it (above) highlights the fact that on this image, the focus
points for most participants is in the centre, with the lower right quadrant having the rest of the
attention. Marketers may be able to use eye-tracking technology through the use of one's
smartphone camera, which they can then have personalised deals based on which products the
consumer is subconsciously paying the most attention to (Patik, 2024). The increase in prominence
of AI in people’s day-to-day lives will lead to more curated and personalized advertisements as well,
meaning that companies will be able to better target their potential consumers with messaging and
branding that they want to experience.

Currently, there is a threat of a significant economic downturn due to looming tariff threats,
and when there is an economic crisis/recession, consumer behaviour begins to change (Fuciu and
Serban, 2024). People start to spend less and save more, meaning that FOMO-inducing
advertisements and promotions that focus on price reductions become more effective (Alexandru
and Andrei-Dorian, 2024).

Limitations
This research report comes with some limitations. For starters, it relies on secondary data to
draw conclusions. On top of that, the focus of this report is on Canadian consumers, but much of the
data used comes from the studies that took place within the U.S. or overseas. Research into FOMO
from a marketing perspective is still an ongoing project, so many studies on similar topics may come
to conflicting conclusions (Good and Hyman, 2024).

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Conclusion
In conclusion, FOMO-inducing marketing strategies are likely to actually become more
prevalent, at least in the short term. While studies are mixed on their findings, many have shown
that this form of consumer behaviour strategy is, in fact, still successful. While the exact shape
FOMO tactics take on do shift as consumers change, some form of it is likely to always be present. In
this research report, various studies that were conducted over the last few years were analyzed in
order to come to a result on the state of FOMO in advertisements. This report looked at both
physical and digital examples of this phenomenon, the ethics surrounding it, similar strategies, and
the potential future implementations. The result was then pitted against the question of “Are
Canadian consumers becoming less responsive to common FOMO tactics? If so, by how much?” It
would seem as though Canadian consumers are not becoming less responsive to FOMO tactics as a
whole, at least if the strategies continue to adapt to the changing trends.

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