Ecommerce Growth

Scarcity marketing: Fix the 6 most common mistakes

Not driving enough sales from your scarcity marketing campaign? – Here are 6 mistakes you make that needs fixing fast! Find out what they are.

Scarcity marketing: Fix the 6 most common mistakes

When you hear the phrase ‘scarcity marketing’, what comes to mind? 

Let’s take an example. 

Have you ever scrolled through ASOS or any other online store of your choice and immediately purchased an item not because it’s particularly cheap but because there are only two units left? We’re sure you have. 

This scenario is a result of scarcity marketing. Now, chances are you wouldn’t have bought that item if there was enough in stock. You’d probably dismiss it or if you liked it enough, said you’ll come back to it. 

Not only is scarcity marketing effective in driving conversions, but it helps you keep your customers hooked to your product or service.

In this article, we’ll be showing you the fundamentals of scarcity marketing, the available types and most importantly, what to avoid when creating a campaign for your ecommerce store. As a bonus, we’ll also show you some of the best scarcity marketing examples you can emulate.

What is Scarcity Marketing?

Scarcity marketing is a tactic where marketers increase the value of a product by reducing the supply. 

This type of marketing thrives on the economic scarcity principle which states that limited supply equals an increase in demand. You see, this principle has shown that people are more likely to buy a product when it is difficult to acquire. This is because the item in question becomes more desirable with scarcity. 

It doesn’t end here. The more in demand a product is, the more the price rises.

Usually, in scarcity marketing, marketers create this artificial scarcity so that potential customers can find it more appealing, exclusive and valuable - thereby leading to a rapid purchase or shelf sweep.

In an experiment quoted by Psychologist Stephen Worchel, 200 female undergraduates were studied based on their reception towards the availability of cookies. At the end of this experiment, it was recorded that not only were the scarce cookies desirable but that they were more valuable when the quantity reduced .

What this study shows is that in scarce marketing, being scarce is good. But what’s better is, transitioning from available to scarce. This helps create the illusion of a buying rush which further reinforces the urge to buy when a customer looks at the stock. After all, if it has gone from available to scarce, what’s stopping it from changing from scarce to finished?

Why the Hell Does Scarcity Marketing Work?

Now you might be thinking, how can this be an effective marketing tactic? 

Here are some of the reasons why scarcity marketing continues to work.

1. Customers Assume It’s Popular and of High Quality

In the experiment referenced earlier, you can see how desirable a product becomes once it transitions from available to scarce. 

One of our employees shared his story of when walked into GAP recently and was shocked that a pile of these little cute onesies which he had seen earlier that morning, drastically reduced to just one pair. Now, moms must love this which means it’s a good piece of clothing. This thought immediately drove him to buy one for his kid. 

So in product scarcity, people think that everyone else wants it or that it must be a quality product. Why else would it run out of stock so fast? And because people assume the popularity of the scarce product, they are more inclined to buy what’s left.

2. The Product Sells Itself

GAP didn’t have to market that pair of onesies we spoke about earlier. It running out of stock meant that there’s everything right with the product. It’s a testimonial on its own. What’s left of the product tells you; 

Hey, I’m the best there is and if you don’t pick me right now, you’re never going to get the chance again”. 

How many people can say no to that? So you don’t even have to promote a scarce product. It sells itself. And that’s why it continues to work.

3. Customers Are Suckers for Exclusivity and Rare Items

Think about the word limited edition, what product comes to mind? You see customers love it when they get a product that not everyone has access to. For instance, you feel special when you have a fountain pen that no one else can get. It’s why people spend a lot of money on original art. 

Exclusivity makes customers feel important  like they are part of an elite group. It makes them want to get the product. Creating exclusivity can be as simple as using phrases that implies exclusivity in your web copy.

These phrases are sensory words that psychologically compels site visitors to make buying decisions based on their emotion, rather than logic. The good thing about using these words is that they are very subtle and do not make you sound pushy.

4. People Usually Experience FOMO

FOMO is short for the fear of missing out. It perfectly describes the anxiety that one experiences when you’re not a part of an event or an exciting occurrence. 

According to research, millennials are the generation who experience FOMO the most and are more likely to create this feeling in others as well - 60% of millennial consumers will impulsively procure an item, within 24 hrs, after experiencing FOMO.

Since this experience can be frequent and contagious, there’s a lot of reactive buying when this happens. This is why scarcity marketing continues to thrive. Introduce it into your brand and watch the ripple effect. 

Four Different Scenarios of Scarcity

Scarcity could take up different forms. It can be any of the following four scenarios

Exclusivity

Recently, we came across a news article about a helmet being sold at a six-figure price and our eye sockets were about to pop out until it was announced that it was worn by popular formula 1 racer- Sebastian Vettel in one of his races. You see this helmet is scarce because it’s exclusive. When something is exclusive it means it’s available, but only for a selected demographic.

Exclusivity is actually more common than you think. Think about golf clubs, gallerias, signed photographs of your favourite celebrities, original albums, being sold for millions of dollars. It can be in the form of exclusive memberships, pre-order and wait lists or even deadlines.



exclusivity - reebok


Now the point of exclusivity isn’t that your product or service will cost millions. It’s about increasing the value by making it scarce. The thing is people believe that if they miss an opportunity to buy your product right now, they will miss out and have to pay more when they buy it the next time.

Exclusivity also acts as a status symbol. Because only a specific demographic has access to it at that point. The moment it becomes easily available, it loses its value. Look at the days after an Apple event. As soon as a newer version of the iPhone is available, people spend the night sleeping outside of the store waiting to make a purchase. Why is this? It’s because they want to be part of the exclusive batch of customers who owned that version first.

Rarity

While rarity is quite similar to exclusivity, there’s a thin difference between these two scenarios. The difference is that with exclusivity, the quantity of the product isn’t exactly limited. However, with rarity, the brand decides the quantity before going into production. An example of this is the Adidas limited collections. In this catalogue, you’d see very limited collections, sometimes a maximum of three items with a limited stock as well.

adidas limited collection

Another example is Nike’s collaboration projects. During launch, the brands already have pre-existing units to be sold. Once the stock is sold out, that’s the end of that particular product. So the perceived lucky few who were able to purchase it, end up with a rare product. The outcome is everyone wants to be among those few who will get the products.

Excess Demand

Another variation of scarcity is when the demand is naturally higher than the supply. So while the product might not be exclusive or rare, people might just like it. When the Playstation 5 was released in 2020, gamers went wild. The demand for the console went up the roof and of course, the supply started to dwindle before more were produced.

In this scenario of scarcity, customers deduce that if it runs out of stock fast enough, people must truly love the product. It’s a type of indirect social proof. If you go through a website and you see a recently restocked pair of headphones drastically reduce in available quantity, it simply means it must have a great sound and quality. You’d be more inclined to buy it and see what the hype is about.

excess demand exmaple


Urgency

This scenario uses a countdown to push a product forward. Customers understand that if they don’t get that product or service at a particular time, it is gone. In this case, the units might be a lot and sometimes even slightly cheaper. But the offer runs for a particular time. 

A very popular example is Black Friday deals. You see products you’ve abandoned all year in large quantities. However, with Black Friday, you get a good deal that’s only on the table for a very limited time.  Another example is Amazon’s lightning deals.

Because of the urgency associated with each deal, it leverages the fear of missing out. Customers are scared to lose out on this offer and that’s why a number of people make impulsive purchases during Black Friday. 

You can introduce this scarcity by adding a timer on your website or making certain items available for only a specific period of time. A trick here is to merge urgency with a discounted price. It always appeals to customers.

pet pro supply - urgency

6 Scarcity Marketing Mistakes That Makes You Look Cheap 

In a research published by the scientific journal publishers, it was noted that when customers detected product scarcity as a sales tactic, the value placed on scarce products became diluted.

To put simply, your customers won’t like it when they find out that you introduced a faux scarcity just to increase the demand for your product. This is why scarcity marketing tactics have to be right. 

Here are some scarcity marketing mistakes you should avoid. They’ll make your brand look cheap.

1. Using it One Too Many Times

Let’s say you go into a store and find a pair of shoes tagged as limited editions. The next month, you walk into the store and find these same shoes under the same tag. You’re going to start doubting its authenticity right? That’s what happens when you overuse scarcity marketing.

Your customers will realize that these products aren’t that exclusive or rare. They’ll start to understand that for your brand, there is always going to be faux urgency. So it loses its potential. The products stop appealing to your customers because they know there’s always going to be another discount or another scarce product they can always get.

This will hurt your brand name because you look desperate and scammy. Worse off, you end up losing sales and existing customers.

2. Pitching ‘Exclusivity” Too Much

So here’s the thing, when you throw the word exclusivity around a lot, it becomes counterproductive. Because if a product is truly exclusive, it announces that by itself. You’d see it from its value proposition and product description. 

For instance, Hermes knows that it produces an exclusive product. Its marketing angle doesn’t come from that standpoint. From how valuable and durable it gets over time, along with the limited units in each production cycle, you’re able to infer that this bag is an exclusive item.

So instead of marketing from the angle of exclusivity, try to focus a lot more on the quantity in stock and how long it will be available. This is the true essence of scarcity marketing.

3. Products That Fail to Deliver

So you’ve successfully integrated scarcity marketing into your sales strategy and it’s working. Sales have gone up and the product is almost truly out of stock. You might start strategizing on how to introduce an advanced level of scarcity marketing. But hey? Do you ever stop to think about what your customers think about the product?

If you bought an item that was advertised as quality and limited, then realized that this product completely sucks, you’ll probably get pretty furious. So will every other customer. This is why you should ensure that your product is standard and that it meets the expectation of your customer. If it doesn’t, your brand image will take a serious hit. This translates to poor sales and poor customer retention.

So note that scarcity marketing is not an avenue to push out the worst items in your store. Your products should be able to sell themselves and deliver to the expectations of your customers.

4. Pushy Sales Tactics

The key to scarcity marketing is to not sound salesy. How do you influence prospects' perception of your product to subtly compel buying decisions? As a customer, the fastest way for me to lose interest in a product is when they push too hard. And there’s a very thin line between selling and pushing too hard.

If you see a product discount available for a window, you obviously don’t want to see the same ad seven times a day. A nudge or reminder truly helps ignite the FOMO feeling but when you constantly harass your customers with reminders, it makes you look desperate and the offer quite fake. So whenever you get the urge to send another reminder, disregard it.

pushy sales emails


Even with your initial emails. Try selling the scarcity or rarity of the product in a non-pushy way. The best sales pitch is one that doesn’t feel like a sales pitch at all. We created a few not so pushy sales email templates that could inspire you. 

5. Extending the Deal

If sales are going great with scarcity marketing, it is always tempting to extend the deal. This applies to when the sales are poor as well. You might think “Hey if I extend this deal period, more people will be inclined to make a purchase.” Unfortunately, it doesn’t work that way. 

Here’s the thing. Before you execute the scarcity principle, take time to thoroughly understand your audience. Know what makes them react positively and negatively. This will help you manage expectations as well as properly tailor your scarcity marketing campaign to your target audience.

Also before you launch, plan your timelines, discounts and availability before you run the campaign. If you can, create a roadmap to help guide you throughout the campaign. Check and cross-check before launching. Once you’re live, the slightest change to the campaign can ruin your whole plan. 

6. Not Taking it One Product at a Time

While you might be inclined to pitch multiple products in one scarcity marketing campaign, it is a bad idea. Here’s why - not only does it make your messaging seem gimmicky, but your offer and product also lose their value. If a visitor can see about fifteen offers all at once, they’ll figure out that they’ll always get offers on your store. Or, it might not really be perceived as valuable as you market them to be.

It can also get really overwhelming for a customer. How are they supposed to make a choice when you’re shoving multiple offers down their throat? 

What we usually suggest in this case is to start with one product. When you welcome customers with one product or offer, it’s a lot more tailored. It also makes them quite receptive to your campaign. Later on, you can persuade them to explore other products. But at this point, they have gone further down in the sales funnel. 

5 eCommerce Brands That Run Scarcity Marketing Campaigns Like No One Else

Running scarcity marketing campaigns on e-commerce brands can be quite tricky. Especially scarcity marketing that converts. However, here are five brands that have done this exceptionally well.

1. Supreme

Asides from being a popular clothing brand, Supreme is also known for its quirky collaborations and products. 

Here’s what they get right when it comes to scarcity marketing. Supreme releases really unique products and frankly speaking, random products for a limited time and at limited availability. Customers go crazy for their campaigns because the products are really unique. When they can get something so exclusive, customers continue buying into it. And the best part, they don’t scream exclusivity.


supreme exclusive products

2. Groupon

Group on is a popular discount coupon site that partners with various brands across the world. What we love about their scarcity marketing campaign is that it is short, direct and simple. There are no pushy sales involved. 

In this picture, you see that they highlighted the content of the value package thereby making the coupon sell itself. The only element of scarcity on this page ad is the limited time remaining. And that’s all. This is why they are good at this game.


groupon limited coupons

3. Amazon

Amazon is proof that you can do it all. Unlike Groupon, Amazon incorporated multiple scarcity strategies to drive a sale. You’d see the countdowns, the ticking tocks, the limited availability and also the discount. There’s also the Number 1 best seller tag which connotes that this product is high quality and that it’s popular amongst other buyers. It has everything that leads you to click on the Add to Cart button.


amazon scarcity marketing


amazon's lightning deal

4. Adidas

We love Adidas because of its exclusive collaborations with superstars from various industries. This exclusivity stems from the fact that there are very limited units of this product pre-launch. And they are only available a certain period after the launch.

One of those exclusive ‘drops’ is the Yeezy products line, in collaboration with the famous pop star, Kanye West. Unlike other brands, Adidas barely creates sales emails for this product. It completely sells itself.

5. eBay

eBay auctions are the best example of scarcity marketing. Here’s why; nothing screams scarcity than an auction. At this point, you know if that product is sold, it’s gone. They add high value to their products through the compelling product descriptions, ticking timer and number of bids.


ebay - scarcity marketing

Final Thoughts

Introducing scarcity marketing into your sales model will help you improve your brand name with your high-quality products and drive conversions. The key is doing it right by not doing too much. Moderation in essence makes you less spammy. 

Not sure what part of your scarcity marketing is right? Schedule a demo with ConvertCart and let the experts get your started and drive more sales for your online store. 

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