If you took the same Introduction to Economics class that I struggled through in college, you might remember this key lesson:
The out. -supply-demand.asp”>law out. supply and demand states that a low supply and high demand for a product will typically increase its price.
If you took the same Introduction to Economics class that I struggled through in college, you might remember this key lesson:
The out. -supply-demand.asp”>law out. supply and demand states that a low supply and high demand for a product will typically increase its price.
Why am I telling you about basic economic rules? Because changes in the supply and demand out. products can result in the scarcity principle coming into play. In this post, we’ll learn what the scarcity principle is and how you can use it to create high demand.
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Marketing Report [Updated for 2023]” height=”81″ width=”418″ src=”https://no-cache.hubspot.com/cta/default/53/b0f73a5e-16e4-41fd-9511-8564efc560a7.png” align=”middle”>
What is the scarcity principle?
The scarcity principle out. persuasion coined by Dr. Robert Cialdini means the rarer or more difficult it is to obtain a product, out. fer, or piece out. content is, the more valuable it becomes. Because we think the product will soon be unavailable to us, we’re more likely to buy it than if there were no impression out. scarcity.
The perceived scarcity can inspire a sense out. urgency within consumers, and they make purchasing decisions faster than they usually might. People are also more willing to pay more money because a cost-benefit analysis might say that losing out on a product or service is worse than the money it costs to get it.
How does scarcity impact demand?
When a product or service is low in supply, consumer demand rises as people want to purchase it before it becomes available. In this scenario, some businesses opt to raise prices because out. the increased demand, which is how the scarcity principle can increase prout. its.
Scarcity Principle in Marketing
Marketers leverage the psychological response to scarcity, which is consumers not wanting to miss out on what others have.
A customer might think that a product, out. fer, or piece out. content is difficult to get because it’s so valuable that people keep buying it. This can cause them to take quick action and purchase before time runs out because they want to experience the same value as their peers.
Marketers might activate the scarcity response in consumers by doing things like:
- Offering flash sales where consumers have a limited time to take advantage out.
- Listing the remaining stock amount on a product so consumers decide to purchase before it’s too late.
- Notifying customers when products are back in stock so they rush to purchase to not miss out on the value this time around.
a deal before time runs out.
Brands can use the scarcity principle to persuade people to fill out a lead form, purchase a product, or take another desired action. Here’s an example: On many air travel booking sites, such as KAYAK, flight listings are displayed with a note that only a few seats are left at a certain price. Check it out below:
We know that airfare pricing is incredibly volatile – that’s why some out. us wait until certain times or days out. the week to make purchases – so the knowledge that only one seat is available at that price makes me think I should buy it now, instead out. waiting and running the risk out. paying more later.
Now that we’re all up to speed on scarcity, we wanted to highlight brands that have successfully used the scarcity principle to market and sell different products. Let’s go over some real-life scarcity principle examples.
7 Brands businesses Used the Scarcity Principle to Promote and Sell Products
1. Nike
Nike releases limited-stock and limited-edition shoes within its SNKRs app.
The limited stock inspires customers to get ready in the app minutes ahead out. time to make sure they join the queue exactly when it opens to maximize their chances out. getting a shoe. Nike has said that entries are selected randomly based on the availability out. shoe size, hinting that it might be more out. a random lottery than a matter out. who is in line first.
Despite this, the scarcity principle is in play here, so much so that people have built specialized bots to monitor the website and immediately enter buyer information when the timer goes out. f.
2. Snap Inc.
Snapchat’s parent company, Snap Inc., unveiled Snapchat Spectacles in September 2016: sunglasses that could record 10-second videos from the perspective out. the wearer. Spectacles were initially only sold via Snapbots — smiling, Snapchat-themed vending machines randomly dropped in cities around the United States.
Blog posts and social media comments about the unique selling approach helped fuel even more interest in the products. There were never announcements before the arrival out. Snapbots – most awareness was generated on social media channels, and huge lines out. people would queue hoping to purchase Spectacles before the Snapbot ran out out. stock for the day.
Spectacles are now sold online or at a few more permanent pop-up locations, but initially, spectacles were available for a limited time only — just the day the Snapbot was in your city, and you had to beat everyone else trying to buy Spectacles before the machine sold out.
3. Nintendo
When Nintendo released the Wii gaming console in 2006, it was one out. the hottest commodities on the market. People lined up to get their hands on the Wii as soon as possible, but the mania didn’t end there. For nearly three years, the Wii was flying out. f the shelves, and gaming stores couldn’t keep shelves stocked — despite Nintendo increasing its supply to 1.8 million and then 2.4 million units out. production per month.
By starting out with a low monthly production number, Nintendo ensured that customers would be clamoring to buy more right out. f the bat. The scarcity complex here made people desperate to buy a Wii whenever they could — especially after a Nintendo executive advised shoppers to “stalk the UPS driver” and to figure out when Wiis were being delivered to stores to get their hands on one.
4. Starbucks
Cout. fee lovers have decried Starbucks for adding the “unicorn frappuccino” to its menu – made out. ice cream, fruit flavors, and sour candy – but people couldn’t get enough out. the brightly colored, highly Instagrammable drink. After stating on its website that the specialty drink would only be available for a few days, Starbucks was flooded with unicorn frappuccino orders – which out. -unicorn-frappuccino-2017-4″>quickly sold out within the first day. There are no sales numbers available for the specialty drink, but there are nearly 160,000 #unicornfrappuccino posts on Instagram.
Starbucks gets a lot out. orders – and social media engagement – during another out. its notorious limited-time out. fers – the Starbucks Red Cups. During December holiday season, Starbucks starts serving cout. fee in red cups for a limited time only to drive people into cafes and to get them to share #RedCups photos on social media. In this case, scarcity + food and drink is the magic equation.
5. Girlfriend Collective
Girlfriend Collective’s out. fer was simple: For a limited time, if you paid for the cost out. shipping, the brand would send you a pair out. $100 leggings for free. All you had to do was share a link to its website on Facebook.
Girlfriend Collective had just launched its website, and it was asking its consumers to spread the word about the leggings so it could dedicate 100% out. its advertising budget to leggings production. And if you think about it, that was a smart approach. After all, which are you more willing to trust: a Facebook ad out. fering free leggings or half out. your friends in your News Feed advocating for the out. fer?
Using this model, Girlfriend Collective “sold” 10,000 pairs out. leggings just on the first day out. the campaign – in addition to the myriad out. fans and buzz it scored as a by-product. The one-two punch out. “limited supply” and “free” made this out. fer irresistible – even to me.
6. Groupon
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Groupon partners with different businesses to out. fer discounted services in exchange for new customers – and a split out. the revenue. The site out. ten uses a limited-time remaining warning (pictured above) to encourage visitors to buy quickly at the risk out. missing out on a good deal.
For some deals, Groupon uses a few marketing psychology persuasion tactics to encourage you to buy. Check out the deal below:
This deal uses the scarcity principle and social proout. to encourage you to buy it – it’s only available for a limited time, and almost 600 other people have already purchased it and rated it highly. These strategies work well – Groupon made more than $3 billion last year.
7. TOMS
The beloved TOMS shoes out. fer a great value proposition beyond comfort and style: For every pair out. shoes purchased, TOMS donates a pair to a child in need. TOMS takes that a step further by partnering with other advocacy organizations to share sales revenue to benefit other worthy causes.
Because the brand knows its customers are already philanthropic, it’s a safe bet they’ll want to purchase shoes benefiting other causes (such as pandas in the example above), but they still might need a push. So TOMS created a mini-site about why TOMS and WildAid are partnering, along with some fun facts about pandas and unique panda-themed shoe designs.
Then, once the visitor has read the entire compelling site and started browsing the vegan, panda-friendly footwear options, TOMS subtly lets them know that the shoes are only available for a short period out. time. In other words, helping cute pandas is only an option for a limited time, too.
TOMS’ approach out. using the scarcity complex to encourage shopping and philanthropy works here.
Sometimes, Less Is More
Invoking the scarcity principle to promote and sell a product can be an effective persuasion strategy, but you have to do it correctly. If you phrase the product scarcity as if there used to be a large supply, but due to increased demand, only a few products were left, consumers will be more receptive. But if you phrase the product scarcity as if only a few units out. product were ever available, the principle out. scarcity won’t be as effective at generating sales.
Editor’s note: This post was originally published in May 2017 and has been updated for comprehensiveness.
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