The fewer of an item there is, the more we want it. From limited edition products to low stock messages, scarcity taps into the behavioural instinct of if it’s rare, it must be valuable. Scarcity is a powerful tool in marketing as it doesn’t just suggest limited supply, it creates a psychological urgency so customers act to not miss out.
Diamonds are a great example of scarcity. Diamonds are actually in surplus and global production is fairly consistent. However, diamonds have been marketed as rare which creates the perception of luxury, thus generating demand and driving up prices.
How does scarcity play out in marketing?
Limited Time Offers
Messages such as ‘ends at midnight’ ‘offer for 24 hours only’ trigger immediate decision making and reduce procrastination.
Low Stock Indicators
If you’re a regular online shopper, you’ll see that many retailers use this device. When customers see ‘only two left in stock’, it makes them more likely to check out as leaving it in their bag feels like too much of a risk.
Limited Edition Products
When brands release limited edition products, it creates hype amongst its customer base and creates perceived demand so people buy the product to not miss out. Status plays into this too as owning a rare or exclusive item reinforces identity. People will say ‘I’m one of the only few to get this.’
Scarcity can be applied to user experiences as well to generate user engagement and push them towards completing a desired action. For example, Ticketmaster uses countdown timers so you checkout before the time runs out. If you’re completing an online form, progress bars make scarcity tangible and more visceral.
Scarcity needs to be applied as the name suggests… scarcely. When used alone as a marketing tactic, it won’t sell a product. The product has to be desired as well as perceived as scarce. Fake scarcity also kills trust. If something keeps reappearing as limited, customers will soon learn they don’t need to act.
When framed clearly and not used intentionally, it becomes a tool for not just sales but to tell the story of your product. Sometimes the most persuasive message isn’t ‘you need to buy this’ but instead ‘you may never get this chance again’.