It’s no secret that scarcity marketing works wonders for businesses. People always have this fear of missing out (FOMO), and it is what motivates them to act. Thanks to this FOMO, scarcity marketing gets to thrive.
But what is scarcity marketing?
It’s a marketing tactic whose foundation lies with the law of supply and demand. According to this concept, items in low supply often cost more. This makes scarce products to appear more valuable than what they actually are, so people would want to buy them..
How Scarcity Marketing Works
With scarcity marketing, you are appealing to the users’ desire to buying ASAP, before a certain product becomes out of stock. And what happens when a product isn’t available anymore?
The product becomes more appealing for users. Based on this principle, marketers can make an item feel exclusive by simply diminishing its stock, showing that it is in high demand. And owning such a product makes people feel more powerful.
As a rule of thumb, scarcity marketing goes hand in hand with discounts, special offers, and deals. But it is not the discount that triggers people to make the purchase. It’s the urgency.
If people see they only have a few days left, and they know that thousands of other people are fighting for the same product that already has low stocks, they will be pushed to buy it. And this is how scarcity marketing works.
“Urgency in the form of scarcity triggers people to make a purchase.”
To drastically increase your sales in 2020, all you need is to know when to use scarcity marketing and how to do it like a pro. Below, we’ll show you 5 powerful scarcity marketing tactics specially created to boost your sales this year and in the future.
Scarcity Marketing Tactics
Display the Exact Product Availability
The first and most important tactic that will help you reap the benefits of scarcity marketing is to show numbers.
Let your customers know exactly how many items you have available in your or your shipping partner’s warehouse. The goal is to inform them that the item is almost sold out, and they’ll have to wait for another month or so until you receive more items.
Doing this will entice your prospects to make a purchase now because tomorrow, it might be too late.
Zappos does a great job displaying the availability of a particular product.
Anything under 1,000 pieces should be listed on your website and in any other marketing channel. You should include this information in your email newsletters, on your site, and on your social media accounts. Make people aware of the items that will soon be out of stock and they’ll come pouring in and order from you.
“The goal is to inform them that the item is almost sold out, and they’ll have to wait for another month or so until you receive more items.”
You can manually edit the items or sync your platform with the API that collects stock information.
What you should aim for is to be as accurate as possible. You don’t want people to see your claim about getting out of stock where in fact your website shows otherwise. That would only hurt the branding you worked hard to build.
So, make sure that the stock item updates every few minutes to reflect your actual numbers.
Create Limited Edition Products
This is another scarcity marketing tactic that can dramatically boost your sales in 2020. In this approach, you produce unique products and offer them under a limited edition. It’s a proven method as a lot of big retailers are doing this, especially during the winter or summer seasons.
For example, if you’re selling mugs online, you could create a mug with a summer motif during the summer. Then, you could order two other unique models available only for December.
“Limited-edition products create a sense of urgency.”
This tactic is also exceptionally smart for retailers who want to expand their product range. If you launch a limited-edition product and you notice that it sells like crazy, then you may opt to make it go mainstream.
Limited-edition products create a sense of urgency, especially in the beginning. This entices the buyers to grab them before you run out of stock.
Come up with Unique Seasonal Offers
Another thing you can do to boost your sales is to design unique seasonal offers. And when I say seasonal offers, I mean offers that can be leveraged by all people but only for a limited time.
For example, McDonald’s does a great job of creating seasonal offers. In the US, they create the McRib sandwich during the fall season. At the same time, Starbucks is offering the Pumpkin spice during Halloween, selling millions of drinks to millions of thirsty fans.
Depending on your niche, you can come up with unique seasonal offers and products.
For instance, if you are selling pancakes online, you could create a unique recipe with pumpkin sauce and other goodies. Just be creative and you’ll be able to leverage the benefits of scarcity marketing in your favor.
This tactic also holds true for events and holidays, just like how watchmaker OMEGA released exclusive timepieces to honor the Rio Olympic Games in 2016. That’s why it pays to know your holiday sales calendar by heart.
Use Real-Time Data
Showing the actual customers that other people are viewing the same product is a surefire way to convince them to act ASAP. Aside from discovering what’s happening behind the scenes, your customers, who are busy scanning the website for deals, will also be enticed to purchase hot items.
But how does this work?
Imagine one of your site visitors is scanning your website, browsing through the product section. He enters a product page and notices a scrolling text that says: “Another 10 people are looking at this product right now. High demand.” That message triggers scarcity for your site visitor, who then decides to make a purchase.
The image below from Printful is a great example of how you can use real-time data.
Real-time data, used in conjunction with limited product availability, will help create scarcity and will enable you to ramp up your sales. However, try not to do that for all your products. This will only make you look desperate to sell everything in your store.
Rather, identify which products are in need of better sales performance. Conduct some A/B testing to determine what products sell poorly and use them to create scarcity.
Use Sales Countdown
Lastly, you can host a flash sale to create demand for a certain line of products. A flash sale is usually held for a limited time, without prior notice. People love flash sales because it makes them think that they are really lucky to get one.
Here’s how a sales countdown looks on Amazon.
You can host a flash sale and use sales countdown for only those people who are visiting your website during a 12-hour period. You can tell people about it via email or via a campaign on social media.
That said, here’s a useful guide from Social Media Examiner on how to promote a flash sale on Facebook and Instagram.
Understanding the Limits of Scarcity Marketing
While scarcity marketing helps boost your sales, you have to remember that there are certain limitations to this strategy.
- Scarcity marketing won’t magically fix underperforming sales. Yes, the strategy is meant to increase the level of desirability of a product, but it doesn’t necessarily mean you’ll get instant sales from it. This is especially true if you’re a new brand and doesn’t have a loyal customer base yet. To find success in this method, you need to have people who will line up to wait for your scarce offering first.
- Scarcity marketing can create too much pressure. Anything excessive is bad, and this applies to this strategy as well. Instead of enticing your prospects to buy, putting too much pressure may result in unnecessary stress to them. This can break ties with loyal customers, so do everything in moderation.
- Scarcity marketing is a trial and error. There’s no “one true formula” to this method. You have to test out every time to find the right tactic that will appeal to your audience. Always test, monitor, and re-test to discover what works.
The Bottom Line
Creating scarcity allows you to double, even triple your sales in a very short amount of time. Adopting this strategy into your digital marketing plan is a surefire way to boost your conversions in 2020 and beyond!
Test the 5 tactics listed above and discover which scarcity marketing tactic is right for you. Pull it off correctly and stand ahead of your competitors as you leverage the true power of this strategy. You’ll certainly love the results at the end of the month.