What is Scarcity Marketing? Concept, Tactics & Examples
Updated: Mar 11, 2021
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Scarcity Marketing is for real and works wonders, simply because it rests on the concept of creating urgency in the mind of the consumers.
The psychology works so well, that consumers might be pushed to buy products that are not ‘required’ but still look tempting.
All the banners and advertising around ‘Limited period offer’ or ‘Only a few left in stock’ makes the consumer act, and not just act, act faster.
So what is this principle of Scarcity Marketing?
How does it turn into something so powerful, that brands all over the world are trying to incorporate the same in various ways?
Let’s try to find the answers to these questions and much more through this post on Scarcity Marketing
The blog post includes the following points:
1. What is Scarcity Marketing?
2. How does Scarcity work in influencing consumers?
3. Tactics used by marketers for Scarcity Marketing?
4. Why use Scarcity Marketing?
Let’s look at each of them in detail now
1. What is Scarcity Marketing?
The idea of Scarcity Marketing revolves around either reducing the supply of the product or holding the availability of the product for some time.
This in turn leads to more people wanting the product, with this urgency in mind that we need to buy soon.
It rests on the basic principle, that we as humans always want those things that are hard to find or difficult to get.
Scarcity marketing takes the advantage of this same principle and creates an enticing demand around the product, by generating excessive need.
So there is always a better chance to sell the product with a self-created urgency instead of making it readily available.
Let’s dig in deeper
2. How does Scarcity work in influencing consumers?
You must have heard the phenomenon of FOMO, that is, the Fear Of Missing Out.
Scarcity marketing makes use of this same psychology in order to be effective.
It’s based on the fact that consumers regard products with lesser availability as more precious.
So through economics, the principle follows the approach of decreasing the availability of your product but keeping the demand constant or higher, creating the much needed scarce.
3. Tactics used by marketers for Scarcity Marketing?
Now there are multiple ways in which marketers make use of this principle to sell their products.
Let’s look at some
a. Only a Few left up for a grab
This is the most common tactic and proves extremely useful to a lot of marketers.
Again, the base of this premise lies in the fact that we want to purchase those things that may be available today but might disappear tomorrow.
It works well also because thanks to the lack of availability, customers also lose out on the freedom of choice, so there is a higher possibility of them choosing your brand.
The best way to incorporate this is to send out emails or messages to your customers, mentioning that your popular products are selling fast and they might soon be sold out.
b. Limited Pricing deals
Who doesn’t love discounts?
As an Indian consumer, more often than not we are always on the lookout for discounts or deals.
And when a brand introduces a ‘limited pricing deal’ we are directly inclined towards the purchase.
The term ‘early bird discounts’ also works very well in regards to this similar offering.
However, it’s important for brands to understand where they need to draw the line, this is because consistent discounts may result in consumers doubting your offering.
c. A little extra for being fast
Another kind of tactic that is commonly used is that of giving the customers a little extra if they buy sooner.
The communication is centered around keeping the availability, limited in nature and then, those who come forth sooner are given extra benefits.
Now, these extra benefits are also limited in nature, maybe only the first 20 customers might get it.
So it’s a win-win throughout.
d. Buy before xx day to get maximum discounts
This doesn’t directly talk about limited products but rather focuses on buying before a specific date to get maximum discounts.
Even though the availability of the product here may not be lesser, it still manages to create some amount of ‘scarcity’.
Because consumers, if they are interested in your product are going to invest in the same.
But with this specific tactic, they buy the product sooner, which is always better for a marketing professional.
The sooner your consumer buys, the better it is because it's less likely for the consumer to then get influenced by the competitors.
e. Festive Offering
This may not necessarily be around a festival, but even cases like ‘Saal ke Sabse saste din’, can be considered under this bucket.
Some brands also come up with specific collections- ‘Christmas Collection’ can be an example, and consumers are more so driven towards the same because they are aware that the quantity is limited.
The product may not be available to anyone else after a specific period of time, it also provides the consumers with some amount of exclusivity, which they might crave.
4. Examples of Scarcity Marketing
Now that we know some tactics, let’s look at brand examples who have been using these tactics to their advantage.
a. Amazon
Amazon uses these tactics very well, the most common of the lot is ‘Only 2 left in stock’.
Now, this might not be a tactic per se, but can also be the truth- irrespective, the consumers are bound to react and act faster.
As a consumer, you may not keep the product in the cart for a long time, because then it would be sold.
b. The Body Shop
Being a loyal customer myself, I love The Body Shop Christmas range.
Every year they come up with this set of products that are only available during the Christmas holidays.
So as a consumer if you do not buy this, you may have to wait for next Christmas.
Conclusion:
Scarcity Marketing works well, and that is the reason behind top companies implementing the strategy.
It ensures a perfect combination of consumer psychology and marketing strategy.