If you took the same Introduction to economics course I struggled with in college, you may remember this key lesson:
the law of supply and demand states that a low supply and high demand for a product will generally increase its price.
Why am I telling you about basic economic rules? Because the evolution of the supply and demand of products can bring into play the principle of scarcity.
In this article, we’ll learn what the scarcity principle is and how you can use it to create high demand.
What is the principle of scarcity?
The principle of scarcity of persuasion invented by Dr Robert Cialdini means that the rarer or more difficult it is to get a product, offer or piece of content, the more valuable it becomes. Because we believe that the product will soon be unavailable to us, we are more likely to purchase it than if there was no impression of scarcity.
Brands can use the scarcity principle to persuade people to fill out a lead form, buy a product, or take some other desired action. Here’s an example: on many air travel booking sites, such as KAYAK, flight listings are displayed with a note indicating that there are only a few seats left at a certain price. Check it out below:
We know the price of airline tickets is incredibly volatile – that’s why some of us are waiting until certain times or days of the week shopping – so knowing that only one seat is available at that price makes me think I should buy it now, instead of waiting and running the risk of paying later.
To find out more about consumers in general, we decided to survey 300 people to see if they were more interested in products with limited supply.
45% of respondents said scarcity makes them want to learn more about a product, while only 17% said if it was too difficult to buy a product, they would find it in another company.
See the results below:
Now that we are all aware of scarcity, we wanted to highlight the brands that have successfully used the principle of scarcity to market and sell different products.
7 brands that have used the principle of scarcity to promote and sell products
1. Snap inc.
The parent company of Snapchat, the pop-up social media app, unveiled Snapchat Shows in September 2016: Sunglasses that can record 10-second videos from the wearer’s point of view. But instead of selling the new gadget online or in a storefront, the glasses were initially sold only through Snapbots – smiley Snapchat-themed vending machines that were randomly dropped off in cities across the United States.
There were never any ads before the Snapbots arrived – most of the awareness was generated on social media chains, and huge lines of people lined up hoping to buy glasses before the Snapbot ran out of stock for the day.
Now the glasses are sold online or in a few more permanent pop-up locations, so there’s no need to queue in front of a vending machine if you don’t want to. But for the initial launch, Snapbots were a unique take on the rarity complex. The glasses were only available for a limited time – just the day the Snapbot was in your town, and you had to beat everyone out trying to buy glasses before the machine ran out.
Plus, the product’s scarcity meant no one – including us here at HubSpot – could stop talking about the glasses. Blog posts and social media comments about the unique selling approach helped drive even more interest in the products.
MediaKix predicted that Snap would reach $ 5 billion in eyewear sales by 2020, However, The glasses did not mark the spirits in the market and the company had to swallow approximately$ 40 million in the unsold inventory after the release of the first version. Despite this failure, the company is still developing several iterations of the product.
No matter how well the products sell, the marketing strategy of using scarcity has been successful in attracting people to a product that they might not otherwise be interested in.
If you weren’t a big gamer when Nintendo released the Wii gaming console in 2006, you might not remember that the Wii was one of the most popular products out there. When it was officially released in November 2006, people lined up to get their hands on the Wii ASAP, but the mania didn’t end there. For nearly three years, the Wii flew off the shelves, and game stores couldn’t keep shelves stocked – despite Nintendo increase its offer to 1.8 million then 2.4 million production units per month.
Supply has finally caught up with demand – 48 million Wii sold later. By starting with a low monthly production count, Nintendo ensured that customers would be clamoring to buy more from the get-go. The rarity complex here has made people desperate to buy a Wii whenever they can – especially after a Nintendo executive advised buyers to “track down the UPS driver” and to find out when the Wii’s were delivered to stores to get their hands on one.
Coffee lovers decried Starbucks for adding “unicorn Frappuccino” to its menu – consisting of ice cream, fruit flavors and sour candy – but people couldn’t get enough of the brightly colored drink. and highly Instagrammable. After saying on its website that the specialty drink would only be available for a few days, Starbucks was inundated with orders for unicorn Frappuccino – which quickly exhausted in the first day. There are no sales figures available for the specialty drink, but there are almost 160,000. #unicornfrappuccino Instagram posts.
Starbucks is getting lots of orders – and social media engagement – during another of its notorious limited-time offers – the Red Starbucks Cups. During the holiday season in December, Starbucks begins serving coffee in red cups for a limited time only to lure people into cafes and get them to share #RedCups photos on social media. In this case, scarcity + food and drink is the magic equation.
4. Collective of girlfriends
The Girlfriend Collective’s offer was simple: For a limited time, if you paid shipping costs, the brand would send you a pair of $ 100 leggings for free. All you had to do was share a link to their website on Facebook.
Girlfriend Collective had just launched its website, and it asked its consumers to promote leggings so that they could devote 100% of their advertising budget to the production of leggings. And if you think about it, that was a smart approach. After all, what are you most willing to trust: a Facebook ad featuring free leggings or half of your friends in your feed pleading for the offer?
Using this model, Girlfriend Collective “sold” 10,000 pairs of leggings just the first day of the campaign – plus the myriad of fans and the buzz he scored as a by-product. The “limited offer” and “free” punch made this offer irresistible – even to me.
Groupon partners with different companies to offer discounted services in exchange for new customers and revenue split. The site often uses a time-limited warning (pictured above) to encourage visitors to buy quickly or miss out on a good deal.
For some offers, Groupon uses a few persuasive marketing psychology tactics to encourage you to buy. Discover the offer below:
This offer uses the principle of scarcity and social proof to encourage you to buy it – it’s only available for a limited time, and nearly 600 other people have already bought it and rated it well. These strategies are working well – Groupon has done over $ 3 billion Last year.
When the Spotify music streaming service first launched, the UK was the only region that did not require an invitation from a friend or Spotify to sign up. But due to the high demand, Spotify UK had to start requiring invitations to handle all news users. The caveat against Spotify’s invitation-only launches around the world? Anyone can sign up for a premium and paid Spotify account. Using the principle of scarcity, Spotify has handled high levels of consumer demand by offering them a way in – for a price. Now, half of Spotify’s 100 million users are paid, subscribers.
Beloved TOMS shoes offer a great value proposition beyond comfort and style: For every pair of shoes purchased, TOMS donates a pair to a child in need. TOMS goes one step further by partnering with other advocacy organizations to share sales revenue for other worthy causes.
Because the brand knows its customers are already philanthropists, it’s a safe bet that they’ll want to buy shoes for other causes (like the pandas in the example above), but they might still have need a boost. So TOMS has created a mini-site explaining why TOMS and WildAid are teaming up, along with fun facts about pandas and unique panda-themed shoe designs.
Then, once the visitor has read the entire fascinating site and started browsing the vegan and panda-friendly shoe options, TOMS subtly lets them know that the shoes are only available for a short time. In other words, helping the cute pandas is also only an option for a limited time.
TOMS ‘approach of using the scarcity complex to encourage shopping and philanthropy works here.
Sometimes less is more
Invoking the principle of scarcity to promote and sell a product can be an effective persuasion strategy, but you need to do it right. If you phrase product scarcity as if there is a large supply, but because of increased demand there are only a few products left, consumers will be more receptive. But if you phrase the scarcity of the product as if only a few units of the product are available, the scarcity principle will not be as effective in generating sales.
Editor’s Note: This article was originally published in May 2017 and has been updated for completeness.