4 Strategies For Building Brands With Scarcity


Lists of bestselling items, from books to cosmetics to music, have a strong influence on us because they signal popularity. When in doubt about what to buy, you will more than likely be drawn to the item that is mentioned to be a bestseller. This distinction helps us slip into the mindless decision-making mode because while bestsellers aren’t always scarce, they do communicate high demand and high sales and prove an effective strategy.

1. Best Sellers

Imagine that you walk into a large bookstore without a clear idea of the book you want to purchase. You could spend hours aimlessly walking down the aisles of books or you could head straight to the displays that say, “Best Sellers.” If you choose one of those books, you are defaulting to the mentality of “that many buyers can’t be wrong.”

My colleague, Janet, explained her experience with a bestseller. Janet and her husband had just replaced the back patio door and wanted to upgrade their windowing covering. They decided to go with custom curtains. When the window covering representative sat down with Janet to go over fabric options, the representative made a comment that one fabric in particular was a bestseller among home designers. From that moment on, Janet was only interested in that “bestselling” fabric and chose not to look at the other options.

Products or services marked as “Most Popular” have the same effect because in essence, it is the same message: everyone else is buying it, so it must be great.

From a business perspective, notating the most popular or best-selling products or services will invoke FOMO because we don’t want to be left out. It will also create a sense of confidence in making a purchase decision because if something is in high demand it must be good. By labeling something as “bestselling” or “most popular”, you’re giving that product a special stamp of approval.

2. Back In Stock

Showing that a product is now back in stock implies that it is popular and has sold out before. This is a simple and very popular tactic because all it requires is you to display when a product is back available for purchase again. Some companies even send out email reminders, such as UNIQLO, Uggs, and Williams-Sonoma to let customers know the news.

3. Number Of Items Left

Why does the “Only 1 left” statement on the product page motivate people to urgently make a purchase? Even if an item is not scarce, showing low levels of inventory, such as “only three left” triggers the same effect as scarcity. One study tested this theory by tracking sales of 35,000 print books on a large e-commerce site. For each product page, basic information such as price, rating, date of product launch and sales rank were listed. Additionally, the pages included a scarcity message showing the available stock and a dispatch cut-off time (i.e. “order within the next n hours to get the good tomorrow”). After two weeks of tracking and later analyzing the data, the research team concluded that adding a scarcity message indicating the amount of units left prompted sales, but mainly when the customers were further down the purchase process. This means they had moved from causal browsing to more intentional shopping. This demonstrates an opportunity for businesses that either offer sales in the online space or promote products or services on their websites. Indicating how many units are left can promote higher sales, but make sure the statement is true and accurate.

Outside of the retail world, popular demand has worked well for service-oriented businesses. Simple statements on websites that show how many clients have been served or the companies that have become clients all elicit a perception of popularity. Even more than that, though, salespeople who make comments such as, “we are only taking on two more clients,” activate demand-related scarcity and a fear of missing out.

Booking.com continues to be a great example of how to use this type of limited-availability scarcity. When this multi-billion-dollar company first included information about the limited number of rooms available at each hotel for a certain price, reservations went through the roof. The number jumped so significantly that the customer service team that it was a system error. However, it was the powerful effect of scarcity that had caused bookings to skyrocket. When customers could see the limited opportunity to purchase the room at the low advertised price, it caused a sense of urgency.

Note: similar to showing how many items are left, another approach in high demand scarcity is to show the number of items sold. For example, a website might show how many times a hotel has been booked that day or how many units of a product have already been sold.

4. Waitlist

A waitlist is not only an indication that a product is in high demand, but also an opportunity for a consumer to still get the hot product…they just have to be patient. In 2003, Banana Republic heavily promoted a $198 jacket, which created demand. However, the retailer then limited the shipments to about half of the normal run, creating a flood of waitlists. There are many more examples of companies using waitlists to signal high demand, including car companies, golf clubs, private schools, apartment complexes, and other non-retailer organizations. Robinhood, the zero-commission stock trading app, had a waitlist of nearly one million people a year before it launched. Robinhood took the waitlist approach again in 2018 and announced a waitlist for commission-free cryptocurrency trading. Within one day, the list grew to over 1,250,000 people.

If all of these companies and industries can successfully signal high demand among products and services, why not create a waitlist prior to launch and do the same? Let customers know that there is a good possibility of the product or service running out (again) based on demand. Or depending on the release date, simply communicate that those on the waitlist get the product or service before everyone else.

As we have learned, demand-related scarcity can serve a business well because it indicates competition and social acceptance and results in a perceived higher product value than an item that is not in high demand. By communicating sales restrictions, bestsellers, back-in-stock products, and current items left or creating a waitlist, a business can ignite the behaviors that result from scarcity.

Key Selling Points

  • When an item is scarce because of high demand versus other circumstances (like limited supply or time), the perceived value is even stronger.
  • This form of scarcity creates a feeling of urgency, based on the belief that once the products are sold out, the chance to own the product is gone forever.
  • Demand-related scarcity can occur when businesses produce inadequate product quantities to meet demand, as well as when businesses distribute a competitive number of products to retail stores.
  • Scarcity due to high demand propels us to do something immediately.
  • Demand-related scarcity appeals indicate competition and social acceptance, as well as product value
  • Scarcity that is caused by demand entices people who want to feel included and/or identify with a certain group.

Contributed to Branding Strategy Insider by: Mindy Weinstein, Author of The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions (McGraw Hill, November 2022).

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