What is Scarcity Marketing and how to use it in your strategy – WAU
Scarcity marketing is an interesting proposal that works with the psychological side of the public. The proposal is to awaken a sense of urgency, given the fear of losing the opportunity to buy. From the definition of the concept to the main success cases, know everything about it!
The lower the supply, the greater the demand? It is not difficult to see that the human being has a strong attraction for what is more scarce, complex, exclusive and limited.
Scarcity marketing uses this behavior to generate the desire to buy from the public, always conveying the idea that there is little of that product. Thus, those who manage to acquire can feel a real privilege.
However, how far does this limited offer really go? The brands have been working more and more with this sense of urgency to awaken a more impulsive and extremely desirable behavior in their customers.
When realizing this, large companies started to invest in strategies that value their products more.
In this post, we will talk more about scarcity marketing and how it is practiced. Understand more about the strategy, learn about the best practices and the gains brought by it, as well as some successful cases. Come on?
What is scarcity marketing?
Consumerism is part of today’s reality. Having is very important, even if it is not always necessary. Given this behavior, the feeling of buying something limited is even more pleasurable and, of course, brands have realized this for some time.
Scarcity marketing focuses on exploring precisely this type of attitude, that is, the sense of urgency to have something that can run out at any time. In addition, the work is also done on the fear of the consumer to be without that product, since it tends to sell out quickly.
This strategy can be applied in, strictly, all commercial segments. The explanation for this desire for what is scarce is in human nature and has a psychological bias.
The basis of the scarcity marketing concept
Wanting what is most difficult is part of human behavior and, when it comes to the field of consumption, it is just another manifestation of that attitude.
A very common example is the desire to have imported clothes, for example. They are not necessarily better quality than national ones, but they are simply not found here.
In this case, the sense of exclusivity is one of those behaviors that scarcity marketing exploits very well. The possibility of having something that few people have gives the feeling of belonging, and this has a lot to do with consumption.
The desire for what is scarce, rare and limited is a purely psychological issue, which, consequently, impacts the behavior of many people.
Companies use different practices to realize the idea that products are scarce and to generate a desire in the public for them, added to the sense of urgency to have something that will sell out quickly.
What are the gains from adopting this strategy?
Scarcity marketing is a definitely advantageous strategy and one that bears much fruit for companies that adopt it.
This is a market position that arouses the fear of losing the opportunity and the sense of urgency for the consumer to then sell. Next, see the main gains from the application of this concept in business models.
Increase in sales volume
The main concrete gain from scarcity marketing is the increase in sales volume. If there is little supply, of course, the public will anticipate to get your unit of that product.
For that, it is enough that marketing knows how to work with the idea that, really, the volume is running out.
When faced with this information, the consumer asks: to lose the opportunity or to guarantee once and for all?
This questioning occurs when, for example, a discount offer on a certain product is made followed by messages such as: “discount valid only for the first 100 purchases”.
Zero inventories quickly
Companies never want to have their production stopped in inventories for long. Often, the way out is promotions and offers.
However, scarcity marketing gives support so that sales reach sufficient volumes so that it is not necessary to give discounts on the final price.
Inventories are zeroed when a certain product is already sold due to the idea that few units have been produced. Again, this creates a sense of urgency on a large scale.
As a result, many people will be persuaded to buy faster and avoid risk, when in fact, the company has not necessarily reduced the volume of available items.
Increase the added value of a product
Brands have already understood that the sense of exclusivity is something that moves the consumer and awakens the urgency and desire for consumption. One thing leads to another and, in this flow, scarcity marketing works together with another aspect: influence marketing.
People relevant to a niche audience or persona can be instrumental in arousing the desire to have a product.
In this scenario, brands connect with their ambassadors and influencers when they present them with products before they are even launched.
When the public sees this product, especially before its launch, the tendency is that the desire to have it will increase a lot.
The result is simple: the added value increases, the product has a different status and stocks run out quickly, in the first days of launch.
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Establish a continuous urgent relationship with the public
There are brands that have already understood how scarcity and limited supply have an impact on their audience. Here, some ideas are mixed that are the formula to awaken consumption, such as:
- sense of urgency;
- feeling of belonging;
- attraction to what is rare;
- involvement by the idea of added value.
Therefore, they deliver to the market much lower than demand. Well, in an immediate and more shallow analysis, it is possible to conclude that this impacts the sales volume, causing a reduction.
However, from another perspective, it is easy to see that this generates loyalty and a sense of continuous urgency. Thus, with each launch, there will be many interested parties practically vying for the opportunity to buy.
What are the main practices applied in scarcity marketing
Applying scarcity marketing is possible through certain certain practices that bring concrete results.
Next, understand how each one is practiced and what is the concept behind them!
High prices combined with low supply
As you saw, the low offer seduces you by the idea of belonging and by obtaining something rare.
In itself, this generates a lot of desire to buy, however, raising prices also works very well. Higher values reinforce this idea of something rare and have immediate effect on the public.
At the same time, higher prices help to have a relevant revenue, since the supply is much lower than the demand. The company does not lose by selling less, since it charges more for each product and, even so, it has great demand.
Seeding for a limited group
Seeding is a very common practice in which companies send products to people with power of influence, as you have seen.
In addition, these previous releases are made at closed events, only for guests who arouse interest in the target audience.
This whole context generates a great curiosity in the brand’s public, who is already looking forward to the big day of the general release. This practice increases the added value of the product and arouses the desire for consumption.
Limited launches are outside the normal brand calendar, offering the opportunity to purchase products that will not return to the market again.
Without much effort, just by informing this supply restriction, brands are able to generate interest and urgency in their audience.
The best way to work on this type of action is plan several limited launches during the year, always with special editions of the product.
An effort to propose something different is necessary, since the consumer will also not be involved by any shallow idea.
Limited time discounts
Discounts are good, but every company usually does that. They actually have more power to conquer when offered for a limited time.
Promotions of the type involving seasonality are common on dates such as Christmas, consumer day and Black Friday, one of the main dates of commerce today.
The consumer knows that the promotion will only last that period, that is, he is aware that the scarcity, in this case, comes through opportunity time limitation.
What are the main success stories of using this strategy?
Some companies have scarcity marketing as the basis for some actions or even for a complete and continuous business model. They are proof that it is possible to work with the fear of being without a product and that this feeling generates sales and growth. Next, see 3 successful cases: Supreme, Wu-Tang Clan and Adidas.
Supreme and its business model
The New York Supreme is one of the giants of streetwear worldwide, and works with fashion inspired by urban style.
You may have heard of it and all of its success depends on its business model: reduced supply and immense demand.
The products sell out in seconds on the brand’s e-commerce and, in physical stores, people line kilometers to guarantee the pieces at launch.
Wu-Tang Clan and the 2 million dollar album
The biggest rap group in history knew how to make money even without being active in the market. In 2015, the collective put on sale an exclusive album, with tracks never released.
The value? $ 2 million. The hype was immense and the news that a businessman paid the amount generated a lot of buzz and visibility for the group. As a result, the Wu-Tang Clan has returned to the spotlight and managed to keep its brand strong and remembered!
Adidas and its stock in real time in e-commerce
Adidas has invested heavily in marketing in recent years and scarcity has been on the agenda. In addition to the limited launches, a simple change in your e-commerce made all the difference: now, users see how many units are left of that product.
Thus, if the number is low, the brand manages to take advantage of the consumer’s fear of being without its unit. This is made possible by this information about e-commerce inventory!
Scarcity marketing is a smart strategy that has immediate effects! With the development of the right actions, it is possible to awaken the need for consumption, especially, urgently.
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