Lessons in Marketing Psychology: Scarcity

We recently published a post outlining the extent to which social proof can be used to influence buying decisions. Ferocious competition across all sectors has propelled social signals to the very top of the marketing psychology pecking order.

Nowadays, it’s not simply a case of telling people how fabulous you are and expecting them to believe you. Unless you can get other neutral parties to sing your praises on your behalf, nobody will take you seriously.

But it’s equally important to remember that social proof is far from the only marketing psychology tool a business has at its disposal. Brands have been using a wide variety of tactics to sell to audiences since the dawn of consumerism.

Few of which have proved more timeless or consistently effective than scarcity.

How Scarcity Influences Purchase Decisions

We humans are naturally predisposed to want things that are available in short supply. You need only to look at 2020/2021’s outbreaks of panic buying for stark reminders of this.

When something is scarce or likely to be around for a limited time only, we want it. Even if it is something we wouldn’t normally be interested in, the fact that it’s finite makes it desirable.

Of course, when something is already desirable to us, the scarcity can make it practically irresistible. From a marketing perspective, you can leverage the economic concept of scarcity to great effect in a wide variety of ways.

Scarcity Theory in Action

One of the most outstanding scarcity-based marketing strategies in recent history came courtesy of Nintendo in 2006.

The company deliberately staggered the launch of the Wii over an extended time period.

Nintendo knew exactly how many people wanted its console, though produced significantly fewer units than were needed to meet demand. All stocks were wiped out the moment they hit the shelves. A few more units were released, and the cycle continued.

Thanks to the scarcity of the Wii, everybody wanted it. It sold more units during its first few months than the Xbox 360 and PlayStation 3, despite both being heralded as superior machines.

Scarcity theory drove people’s desire for the Wii (and thus, the console’s sales) through the roof.

Simple Yet Effective Scarcity Tactics

There are several easy yet surprisingly effective ways to bring scarcity into an everyday marketing strategy. Some of which are subtler than others, but never fail to have the desired effect.

For example:

Out of Stock Labels

Clearly stating that something is out of stock on your website gives the impression it’s a product where demand has outpaced supply. Consequently, it must be something desirable, in short supply, and generally fantastic.

When an out-of-stock product comes back into stock, people who saw those out-of-stock labels often feel compelled to make a purchase. You can even use this as an excuse to collect direct marketing data, encouraging users to sign up for notifications when the product becomes available.

Limited Units Left

Another great way of shifting units is to use the classic ‘Only X Units Left’ tactic. This leverages the psychology of FOMO (fear of missing out). It leads people to regularly buy things they don’t really want, because they can’t bear the thought of missing out.

It’s exactly the same with limited-edition lines – grab it now or regret it forever; it’s easy to see why this works so well.

Flash Sales

A flash sale can motivate impulse purchases, bringing both time limitations and limited unit numbers into the same strategy. The shorter the sale, the more likely it is people will pick things up without giving them a second thought.

Strategically positioned countdown timers and warnings ‘not to miss out’ can be pure gold for encouraging as many impulse purchases as possible.