1. Best Sellers

Imagine that you walk into a large bookstore without a clear idea of the book you want to purchase. You could spend hours aimlessly walking down the aisles of books or you could head straight to the displays that say, “Best Sellers.” If you choose one of those books, you are defaulting to the mentality of “that many buyers can’t be wrong.”

My colleague, Janet, explained her experience with a bestseller. Janet and her husband had just replaced the back patio door and wanted to upgrade their windowing covering. They decided to go with custom curtains. When the window covering representative sat down with Janet to go over fabric options, the representative made a comment that one fabric in particular was a bestseller among home designers. From that moment on, Janet was only interested in that “bestselling” fabric and chose not to look at the other options.

Products or services marked as “Most Popular” have the same effect because in essence, it is the same message: everyone else is buying it, so it must be great.

From a business perspective, notating the most popular or best-selling products or services will invoke FOMO because we don’t want to be left out. It will also create a sense of confidence in making a purchase decision because if something is in high demand it must be good. By labeling something as “bestselling” or “most popular”, you’re giving that product a special stamp of approval.

2. Back In Stock

Showing that a product is now back in stock implies that it is popular and has sold out before. This is a simple and very popular tactic because all it requires is you to display when a product is back available for purchase again. Some companies even send out email reminders, such as UNIQLO, Uggs, and Williams-Sonoma to let customers know the news.

3. Number Of Items Left

Why does the “Only 1 left” statement on the product page motivate people to urgently make a purchase? Even if an item is not scarce, showing low levels of inventory, such as “only three left” triggers the same effect as scarcity. One study tested this theory by tracking sales of 35,000 print books on a large e-commerce site. For each product page, basic information such as price, rating, date of product launch and sales rank were listed. Additionally, the pages included a scarcity message showing the available stock and a dispatch cut-off time (i.e. “order within the next n hours to get the good tomorrow”). After two weeks of tracking and later analyzing the data, the research team concluded that adding a scarcity message indicating the amount of units left prompted sales, but mainly when the customers were further down the purchase process. This means they had moved from causal browsing to more intentional shopping. This demonstrates an opportunity for businesses that either offer sales in the online space or promote products or services on their websites. Indicating how many units are left can promote higher sales, but make sure the statement is true and accurate.

Outside of the retail world, popular demand has worked well for service-oriented businesses. Simple statements on websites that show how many clients have been served or the companies that have become clients all elicit a perception of popularity. Even more than that, though, salespeople who make comments such as, “we are only taking on two more clients,” activate demand-related scarcity and a fear of missing out.

Booking.com continues to be a great example of how to use this type of limited-availability scarcity. When this multi-billion-dollar company first included information about the limited number of rooms available at each hotel for a certain price, reservations went through the roof. The number jumped so significantly that the customer service team that it was a system error. However, it was the powerful effect of scarcity that had caused bookings to skyrocket. When customers could see the limited opportunity to purchase the room at the low advertised price, it caused a sense of urgency.

Note: similar to showing how many items are left, another approach in high demand scarcity is to show the number of items sold. For example, a website might show how many times a hotel has been booked that day or how many units of a product have already been sold.

4. Waitlist

A waitlist is not only an indication that a product is in high demand, but also an opportunity for a consumer to still get the hot product…they just have to be patient. In 2003, Banana Republic heavily promoted a $198 jacket, which created demand. However, the retailer then limited the shipments to about half of the normal run, creating a flood of waitlists. There are many more examples of companies using waitlists to signal high demand, including car companies, golf clubs, private schools, apartment complexes, and other non-retailer organizations. Robinhood, the zero-commission stock trading app, had a waitlist of nearly one million people a year before it launched. Robinhood took the waitlist approach again in 2018 and announced a waitlist for commission-free cryptocurrency trading. Within one day, the list grew to over 1,250,000 people.

If all of these companies and industries can successfully signal high demand among products and services, why not create a waitlist prior to launch and do the same? Let customers know that there is a good possibility of the product or service running out (again) based on demand. Or depending on the release date, simply communicate that those on the waitlist get the product or service before everyone else.

As we have learned, demand-related scarcity can serve a business well because it indicates competition and social acceptance and results in a perceived higher product value than an item that is not in high demand. By communicating sales restrictions, bestsellers, back-in-stock products, and current items left or creating a waitlist, a business can ignite the behaviors that result from scarcity.

Key Selling Points

• When an item is scarce because of high demand versus other circumstances (like limited supply or time), the perceived value is even stronger.
• This form of scarcity creates a feeling of urgency, based on the belief that once the products are sold out, the chance to own the product is gone forever.
• Demand-related scarcity can occur when businesses produce inadequate product quantities to meet demand, as well as when businesses distribute a competitive number of products to retail stores.
• Scarcity due to high demand propels us to do something immediately.
• Demand-related scarcity appeals indicate competition and social acceptance, as well as product value
• Scarcity that is caused by demand entices people who want to feel included and/or identify with a certain group.

Contributed to Branding Strategy Insider by: Mindy Weinstein, Author of The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions (McGraw Hill, November 2022).

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We see scarcity often with infomercials, as time is limited to take action. During a conversation I had with Kevin Harrington, an original “shark” on the TV show Shark Tank, creator of the infomercial, and Pioneer of the As Seen On TV industry, he talked about this concept. He explained, “I was introduced to this whole scarcity way of selling back in the early 80s. Not only was I exposed to it when selling on Home Shopping Network, but also when selling on infomercials. We would sometimes say you must order within a certain period of time to get the product or special offer.” With this language, a sense of urgency was created.

Even 40 years after his initial introduction to scarcity selling, Kevin explained that he still sees this concept in action. For example, we talked about big celebrities, such as the Kardashians, and how they use a newer form of scarcity referred to as a “drop.” The Kardashians might tell their audience that they will put 10,000 pieces out tonight, but once they’re gone, they’re gone. Within hours, the products sell out. We see the same thing with a growing number of brands, including Nike, Supreme, Off White, and even Amazon, which has a program where influencers curate a collection of clothing that is then available for shoppers for 30 hours or less. Guess what Amazon calls this program? The Drop. No matter the phrasing, it sounds very similar to what has been done for decades within infomercials and shopping channels.

On the flip side, companies that participate in such drops that tout limited quantities know that over time, they can’t continue to drop or promote the same product over and over again. If they did, the effects of scarcity won’t exist. That is where limited-editions really shine. Home shopping networks have taken a creative approach to this concept.

“QVC might sell the same product for multiple years and each time it is offered, it sells out. Eventually, we might make it a limited-edition by offering a slightly different version of the original product. For example, if it was a 9-piece cookware set, we might make it an 11-piece cookware set by including 2 more lids. It is now a limited-edition product,” explained Kevin. The brilliance of this variation in the cookware set, is that it is also instantly different than what other stores might be selling.

In advertising, scarcity appeals highlight features associated with the uniqueness, rarity, or unavailability of a product or opportunity. Technology, including social media and other digital sources, has only served to foster this type of influence tactic. As a result, scarcity has become a mainstay approach in marketing and psychology because it tends to improve the effectiveness of advertisements and sales pitches, and changes behaviors and attitudes.

Scarcity Affects The Brain

Not only has scarcity been studied from a psychological perspective, it’s also been examined from a neurological lens. With advancements in neuroscience, researchers can now see the activity in our brains when faced with scarcity. That is exactly what happened in a 2019 study when participants bid on products in an auction simulation. When the products shown were positioned as scarce, fMRI scans showed that the area of the participants’ brain (i.e. orbitofrontal cortex) that is associated with valuation processes had a rise in activity. Participants consequently bid higher on scarce products than non-scarce products. From this study, we know that scarcity can quickly trigger the evaluation of a product’s value and result in a swift decision.

Contributed to Branding Strategy Insider by: Mindy Weinstein, Author of The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions (McGraw Hill, November 2022).

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What this study tells us is that scarcity may increase your sense of urgency to make a decision, leading to a mentality of “buy it now.” This thought process hinders our cognitive ability to analytically process costs and benefits in a sensible manner. Instead, our cognitive resources become focused on processing why you should buy something and suppresses any other thoughts that may impede the decision to purchase.

This study, which is among the many that have measured brain activity related to scarcity, proves that scarcity isn’t a made-up influence factor—it’s something you can actually see happening in the brain through fMRI scans.

Our brains are hardwired for survival, which is why we often focus on what we don’t have. Scarcity causes our brain to shift its focus onto what it considers urgent. If there is something we really want to buy that’s also hard to get, our brains shift into gear and place mental energy and focus onto rectifying the decision because from our mind’s perspective, this need is now urgent.

For instance, let’s consider the McRib.

Limited Availability As The Greatest Selling Point

The McDonald’s McRib sandwich—that boneless pork patty molded into the shape of ribs, slathered with BBQ sauce, and topped with raw onions and pickles—has achieved cult status, mostly because of its scarcity. The McRib is offered only for a limited time; it is not uncommon to see the telltale signal of scarcity in McDonald’s ads, “While supplies last.”

The iconic sandwich made its debut in the company’s U.S. restaurants in 1981 and ran until about 1985. Sales had dropped for the product, which caused its removal from the permanent menu. In the late 1980s, McDonald’s decided to release the McRib as a limited-time product and have some fun with it. They would release it temporarily in local markets around the United States, and even in some global locations.

In 2005, McDonald’s launched the farewell tour for the McRib, which resulted in tremendous buzz, including a website that was promptly created to save the iconic sandwich. Due to the immense success of the farewell tour, additional farewell tours came out in 2006 and 2007. Then in 2010, the McRib was released yet again emphasizing the legend of the sandwich. Over the years, chasing the McRib has become a phenomenon and has been the focal point of numerous parodies on TV shows, including The Simpsons, How I Met Your Mother, and Rosanne. Even on Full House, Becky says “Joey, what’s going on? I haven’t seen you this excited since they brought back the McRib.”

McDonald’s has approached the concept of scarcity in a unique way, which is what makes the McRib unique and in demand. The McRib appears only periodically on the McDonald’s menu and the geographic locations in which it appears can vary. This has left people wanting and demanding its release. You never know when and where it will show up and its limited availability turned into its greatest selling point. Turns out, we like something more when we can’t take it for granted.

Over time it seems that the unpredictability of the McRibs’ release has resulted in a passion for the limited-time McRib and has also prompted bloggers to write about the sandwich, fans to join social media groups to discuss “McRib sightings” and even people to develop websites solely focused on the popular sandwich. One McRib fan, Alan Klein, built the popular McRib Locator website where fans can locate, report sightings of and talk about the McRib. Numerous Facebook pages exist dedicated to the sandwich with thousands of followers. One fan bragged that he had 27 McRib sandwiches over a 4-week time span. This fan also explained that during McRib season, he thinks about the tangy pork sandwiches throughout the day. It becomes an obsession for many. They hyper-focus on the limited availability of this sandwich.

McDonald’s successfully used the McRib to build brand affinity and long-term loyalty with customers. There continues to be a frenzy among superfans, as they flock to McDonald’s restaurants to buy the sandwiches before they go away. It’s because of these fans, and ultimately McDonald’s brilliance with limited-time offerings, that the McRib has been kept alive for nearly four decades.

The Motivations Behind Scarcity

Marketers use scarcity to influence consumers by appealing to how they aspire to be perceived by other people. If someone wants to be envied or admired by other people, there will be a strong attraction to a product that’s exclusive, in limited supply, or a limited edition.

As humans, we have wants, needs, and desires, all of which are at the core of consumer behavior. The idea that something can be here today and gone tomorrow drives most of us crazy, and it’s what makes scarcity such a powerful influence in how we make decisions. Fear of not having something has existed for time immemorial. While this fear can be associated with essential things such as food, water, and shelter, it is also often tied to nonessential material possessions.

We want what we want when we want it. We don’t want that air fryer to be sold out on Amazon or eBay. We don’t want our time to get that deal or special item to be limited, even when it is. We don’t want other kids to get that new Lego set before our own kids do. When our desires are not met, we feel a sense of loss. Scarcity causes anxiety because we have a fear of missing out (FOMO). This anxiety can lead to a perceived loss of personal control—and we don’t like not having control. When it comes to scarcity, the only way to regain control is to get our hands on the scarce item. When we do, our feeling of control is restored.

Scarcity Is Extremely Fragile

As powerful as scarcity is, it is a force that is extremely fragile. Using scarcity in marketing messages is a risk—one that should be carefully considered and mitigated. Scarcity must be validated by the person on the receiving end of your message through signals that prove there is some type of limited availability. Consider the following:

• There is a limited-time sale with deep discounts, but no expiration date.
• A company claims that an item is nearly sold out, but a consumer does a quick search online and finds the opposite to be true.
• A retail store announces that product quantities are low, but the shelves are fully stocked.
• The exclusive membership club is always crowded.
• A fashion brand advertises that a new jacket is available in limited quantities, but everyone seems to have it.

In all these scenarios, trust gets shattered and the product’s value plummets. Consumers often share information on review sites, discussion forums, and social media platforms. It doesn’t take long for a company’s credibility to falter when they are viewed as being manipulative. When it is obvious that a scarcity claim was made up to only improve sales, it can irreparably harm a business’s reputation.

Applying Scarcity

There is no question that scarcity has a powerful influence over us, more than most of us realize and it can be effectively applied in many ways and in many styles. It is a power that can be used to manipulate and control or in a more positive light, make us smarter about the decisions we make. Once you are aware of the role scarcity plays in your own life, you’ll be able to make better informed and thought-out decisions.

KEY SELLING POINTS

• When a (truthful) scarcity message is added to an advertisement, it encourages us to act (i.e.: make a purchase, donate, etc.)
• Scarcity has become a mainstay approach in marketing and psychology because it tends to improve the effectiveness of advertisements and sales pitches, and changes behaviors and attitudes.
• Scarcity may increase your sense of urgency to make a decision, leading to a mentality of “buy it now.”
• Once you are aware of the role scarcity plays in your own life, you’ll be able to make better informed and thought-out decisions.

Contributed to Branding Strategy Insider by: Mindy Weinstein, Author of The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions (McGraw Hill, November 2022).

The Blake Project Can Help Craft Your Story In The Strategic Brand Storytelling Workshop

Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education

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