Have you ever noticed how some offers seem too good to pass up? Or you’ve felt like you had to act fast because of a limited-time offer. That’s the power of scarcity marketing. 

It’s a tactic that uses psychology to make us feel like we need to act quickly before we miss out on something special. 

In this blog post, we’ll examine how scarcity marketing works and why it’s so effective. We’ll also explore some examples of brands that have used this strategy to boost their popularity and drive sales.

What is the scarcity marketing principle? 

The scarcity principle is when marketers and salespeople create a sense of urgency to put you, the customer, in a whirlwind of decision-making to buy their products. It’s a popular strategy used by brands that creates a notion of exclusivity by deliberately restricting the availability of products. 

Furthermore, whenever a product is launched in a limited capacity, people automatically want it more. Online retailers use this tactic too. Remember the regular notifications saying your favorite items are running low on stock? Or there is a limited-time discount; this pushes people to believe that this is the best price they can get and fast tracks their decision-making. 

Luxury brands capitalize on the scarcity principle by introducing limited-edition collectibles or exclusive items that fuel the desire to possess prestigious and rare commodities.

In the tech industry, companies often leverage the scarcity principle during product launches by promoting limited quantities available for pre-order or offering exclusive early access to a select few.

Why does scarcity marketing work? 

Scarcity marketing taps into the human mind and the innate fear of missing out. The sense of urgency customers feel when they want something but might not get it if they don’t purchase immediately is why scarcity marketing works.  

1. Showcases the popularity of the product

A product is often only as valuable as its perceived value – this is amped up whenever it is in high demand. Sellers make products hard to find and get their hands on, giving off the impression that they are highly valuable and increasing their popularity. 

2. Exciting consumers for a rare product

A limited supply of products is a sure way to convey to customers that if they don’t purchase soon enough, they never can. This narrative generates excitement, and this exclusive access to the products becomes an effective strategy to make the product ‘rare’.

This approach can make potential customers feel special and create a sense of urgency around your product. Leveraging the power of scarcity can make your product appear more valuable and desirable to consumers. 

3. Fear of Missing Out (FOMO)

People want to be included even when some things don’t interest them. This is how FOMO is generated. This is a natural fear of missing out on something, especially when everyone around is talking about it. So whenever something has limited supply or exclusive access, this scarcity pushes people to make impulsive decisions to buy the products. Most customers would rather spend more money to purchase an item than regret missing out on it. 

4. Psychology reactance 

Even if people have little interest in a product, suddenly, if their access to it is restricted, there will be a natural urge to regain that freedom. This reactance pushes customers to overcome the limitation that stopped them earlier and make that purchase. 

This is why digital marketers utilize scarcity as a powerful motivator in their campaigns.

Examples of brands using the scarcity marketing tactics 

While there are several brands out there using scarcity marketing in their organic and paid campaigns, let’s take a look at some of our absolute favorites: 

1. Nintendo

The popularity of the Nintendo Wii gaming console in 2006 was incredible. People eagerly lined up to get their hands on the revolutionary device, and the demand continued for almost three years. 

Despite Nintendo increasing production to 1.8 million and then 2.4 million units per month, stores still struggled to keep up with the overwhelming demand. This was due to Nintendo’s clever strategy of initially limiting production, which created a scarcity complex that drove people to become desperate to own a Wii. 

The scarcity principle played a significant role in the Wii’s success, fueling immediate sales and sustaining the console’s popularity for an extended period. Nintendo’s scarcity marketing strategy is a compelling example of how scarcity can create incredible demand for a product.

2. Starbucks 

Starbucks received criticism for adding the “unicorn frappuccino” to its menu, made of ice cream, fruit flavors, and sour candy. However, customers couldn’t get enough of the brightly colored, highly Instagrammable drink. 

After announcing that the specialty drink would only be available for a few days, Starbucks was flooded with unicorn frappuccino orders, leading to a complete sell-out within the first day. While specific sales figures are unavailable, the drink’s popularity is evident from the staggering number of Instagram posts—nearly 160,000 under the hashtag #unicornfrappuccino.

Starbucks has a history of successfully leveraging limited-time offers to generate a surge in orders and create significant social media engagement. One such example is the Starbucks Red Cups, introduced during the holiday season in December. For a limited time, Starbucks serves its coffee in festive red cups, encouraging customers to visit their cafes and share their experiences by posting photos with the #RedCups hashtag on social media. This combination of scarcity, food, and drink has proven to be a winning formula for Starbucks, driving customer footfall and online buzz.

Starbucks effectively uses scarcity in its food and beverage offerings to create a sense of urgency and exclusivity. This encourages customers to visit Starbucks, share their experiences on social media, and ultimately, boosts sales and customer loyalty. 

Starbucks’ marketing approach of positioning its products as limited-time opportunities taps into consumers’ desire for unique experiences and the fear of missing out, resulting in a powerful combination of consumer excitement, increased demand, and a boost in brand awareness and engagement.

Recommended read: Unveiling Starbucks social media marketing strategy and what you can learn 

3. Spotify 

Spotify had already become quite popular in Europe before it launched in the US with much excitement. Instead of immediately opening up to the public, they chose to have an invite-only system for their free service. This decision created a sense of exclusivity and anticipation among music lovers.

Users had two options to access Spotify’s free service- waiting for an invite or paying a subscription fee of $4.99 or $9.99 for Unlimited or Premium, respectively. This approach effectively capitalized on users’ eagerness to experience the highly-regarded music streaming platform.

By implementing the invite-only model, Spotify strategically leveraged the concept of scarcity. The limited availability of invites generated a desire among music enthusiasts to secure access and become part of the exclusive group enjoying the superior music streaming service. It created a sense of prestige and excitement, prompting people to eagerly await their invitations or consider upgrading to a paid subscription for immediate access.

Spotify’s decision to restrict access enhanced the perception of their service’s quality and allowed them to manage their user base and scale their infrastructure effectively. By controlling the influx of new users, Spotify ensured a smooth and seamless experience for those lucky enough to gain entry.

Ultimately, Spotify’s invite-only approach proved successful due to its highly-anticipated US release, superior product offering compared to competitors, and the strategic use of scarcity to fuel desire and drive adoption. This approach established Spotify as a leading music streaming service and created a buzz and excitement that further propelled its growth and popularity.

Recommended read: How Spotify uses social listening to stay on top of their game

4. OnePlus

One Plus is a smartphone brand that became popular through a clever marketing campaign centered around an invite-only system. This approach helped OnePlus manage demand and added hype and mystique to its products. Once OnePlus established itself as a top-tier brand, it discontinued the invite-only system and expanded its offerings to all. 

The OnePlus One is the first smartphone sold by OnePlus and became known as the phone sold out of stores. When OnePlus released the OnePlus One in 2014, it could only be purchased through an invite, which consumers were not used to. Consumers were denied the opportunity to go to a store and try the phone out for themselves before buying it, making the OnePlus One all the more unique and desirable. 

The enigmatic phone caught the attention of many, leading to more than 25 million visits to the OnePlus website in less than a year after the smartphone’s launch and close to a million sales. OnePlus effectively leveraged the scarcity principle by employing the invite-only system, tapping into people’s desire for unique experiences and the yearning to be part of an exclusive club. This marketing strategy generated buzz, heightened anticipation, and positioned OnePlus as a brand that offered something extraordinary and different from the mainstream smartphone market. 

As OnePlus established itself as a top-tier brand, it opened up its products to a broader market. The success of OnePlus’ invite-only marketing campaign showcased the power of scarcity in capturing consumer attention, creating a sense of privilege, and driving significant interest and sales. It solidified OnePlus as a prominent player in the smartphone industry, and their subsequent expansion reflected the confidence and momentum they had gained.

5. Nike

It’s interesting how scarcity marketing applies to the re-releases of vintage sneakers. Take, for instance, the original 1984 Jordan “Bred” 1 sneaker that can fetch up to $20,000 in the resale market due to its popularity and rarity. These shoes have been re-released twice, and each new iteration leverages the scarcity of the original sneaker to build hype around its re-release. 

Despite the new versions being available, the original shoes still maintain their scarcity value, and Nike continues to drive sales. It’s a marketing strategy that benefits both parties. Consumers can own iconic sneakers, while Nike benefits from increased demand and sales. The combination of scarcity, nostalgia, and cultural significance creates a powerful marketing force that taps into consumers’ desire for unique products.

Use scarcity marketing wisely to accelerate your business 

Marketing is a tricky business, isn’t it? 

Scarcity marketing, in particular, can be exciting and suspicious to potential customers. But as marketers, it is important to find a way to create a sense of urgency without sacrificing transparency and authenticity. 

Responsible use of scarcity can be a powerful tool for brands, helping to captivate audiences, create a fear of missing out, and build genuine connections with customers.

Scarcity marketing can be indispensable in organic and paid marketing campaigns if you use it correctly. 

At Radarr, we don’t just help you deep dive into how your marketing campaigns are performing, but also how your audience is reacting to them. Our experts proactively gather these insights and share it on the blog for you to implement. 

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