How 7 Brands Created High Demand [Research]
When you took the same Introduction to Economics In the 2nd class I fought through in college, you may remember this important lesson:
The law of supply and demand states that low supply and high demand for a product typically increase its price.
Why am I telling you about basic economic rules? Because changes in the supply and demand of products can lead to the scarcity principle being applied.
In this post you will learn what the scarcity principle is and how you can use it to generate high demand.
What is the scarcity principle?
Dr. Robert Cialdini’s principle of scarcity states that the rarer or more difficult a product, offer or content becomes, the more valuable it is. Since we believe the product will soon be unavailable, we are more likely to buy it than if there was no sense of scarcity.
Brands can use the scarcity principle to convince people to fill out a lead form, buy a product, or take some other desired action. Here’s an example: Many air travel booking sites, such as KAYAK, display flight deals stating that there are only a few seats left at a certain price. Check it out below:
We know that airfare prices are incredibly volatile – that’s why some of us wait until certain times or days of the week to make purchases – and knowing that there is only one seat available at that price makes me think I can buy it should buy now. instead of waiting and taking the risk of paying more later.
To learn more about general consumers, we decided to interview 300 people to see if they were more interested in limited-offer products.
45% of respondents said the scarcity made them want to learn more about a product, while only 17% said they would find it with another company if it was too difficult to buy a product.
See results below:
Data Source
Now that we are all up to date on the scarcity, we wanted to highlight brands that have successfully used the scarcity principle to market and sell various products.
7 brands that used the scarcity principle to promote and sell products
1. Snap Inc.
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The short-lived social media app Snapchat’s parent company Snap Inc. introduced Snapchat Spectacles in September 2016: sunglasses that could record 10-second videos from the perspective of the wearer. But instead of selling the new gadget online or on a store front, Spectacles were initially only sold through Snapbots – smiling Snapchat-themed vending machines that were randomly dropped in cities across the United States.
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There were never any announcements prior to the arrival of Snapbots – most of the attention was on. generated social media Canals and huge lines of people stood in line in hopes of buying Spectacles before the Snapbot sold out for the day.
Now Spectacles are sold online or at a few other permanent pop-up locations so you don’t have to queue in front of a machine if you don’t want to. But for the first start, the Snapbots were a unique approach to the scarcity complex. Spectacles was only available for a limited time – just the day the Snapbot was in your town and you had to beat everyone else who tried to buy Spectacles before the machine sold out.
Also, the scarcity of the product meant that no one – including us here at HubSpot – could stop talking about the Spectacles. Blog posts and social media comments on the unique selling point contributed to even more interest in the products.
MediaKix predicted that Snap would have $ 5 billion in sales with Spectacles by 2020, but Spectacles failed to make an impression on the market and the company swallowed about $ 40 million in unsold inventory after the first version was released. Despite this flaw, the company is still developing multiple iterations of the product.
Regardless of how well the products sold, the marketing strategy helped capitalize on the scarcity to move people to a product they might not otherwise have been interested in.
2. Nintendo
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If you weren’t a big gamer back when Nintendo launched the Wii game console in 2006, you may not remember that the Wii was one of the hottest goods out there. When it was officially released in November 2006, people were queuing to get their hands on the Wii as soon as possible, but the mania didn’t end there. For nearly three years, the Wii flew off the shelves and game stores couldn’t keep the shelves in stock – even though Nintendo increased its supply to 1.8 million and then 2.4 million production units per month.
Supply eventually caught up with demand – Wiis sold 48 million later. By starting with a low monthly production count, Nintendo made sure customers would buy for more the first time. The scarcity complex here has led people to buy a Wii whenever they could – especially after a Nintendo manager advised buyers to “track the UPS driver” and find out when Wiis are being delivered to stores to to get your hands on one.
3. Starbucks
Coffee aficionados have berated Starbucks for adding the “unicorn frappuccino” to their menu – made up of ice cream, fruit flavors, and sour candy – but people couldn’t get enough of the colorful, highly Instagrammable drink. After it was announced on its website that the specialty drink would only be available for a few days, Starbucks was inundated with unicorn frappuccino orders – which sold out quickly within the first day. There are no sales figures for the beverage specialty, but almost 160,000 #unicornfrappuccino posts on Instagram.
Starbucks receives lots of orders – and social media engagements – during another of its infamous limited-time offers – the Starbucks Red Cups. During the Christmas season in December, Starbucks only serves coffee in red cups for a limited time to drive people to cafes and get them to share #RedCups photos on social media. In this case, scarcity + food and drink is the magic equation.
4. Girlfriend collective
The Girlfriend Collective offer was simple: for a limited time, if you paid the shipping cost, the brand sent you a pair of $ 100 leggings for free. All you had to do was share a link to his website on Facebook.
Girlfriend Collective had just launched its website and asked its female customers to distribute the leggings so that it could use 100% of its advertising budget to produce leggings. And when you think about it, it was a smart approach. Because who do you trust more: A Facebook advertisement with free leggings or half of your friends in your news feed who advertise the offer?
With this model, Girlfriend Collective already “sold” 10,000 pairs of leggings on the first day of the campaign – in addition to the countless fans and enthusiasm it generated as a by-product. The double punch of “limited offer” and “free” made this offer irresistible – even to me.
5. Groupon
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Groupon works with various companies to offer discounted services in exchange for new customers – and a breakdown of sales. The website often uses a time-limited residual warning (pictured above) to encourage visitors to buy quickly without missing out on a great deal.
With some offers, Groupon uses some marketing psychology persuasion tactics to encourage you to buy. Check out the offer below:
This deal uses the scarcity principle and social proof to encourage you to buy – it’s only available for a limited time. and almost 600 other people have already bought it and rated it highly. These strategies work well – Groupon made more than $ 3 billion last year.
6. Spotify
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When the music streaming service Spotify first launched, the UK was the only area that didn’t require an invitation from a friend or Spotify to sign up. However, due to the high demand, Spotify UK actually had to ask for invitations to manage all of its message users. The reservation about launching Spotify around the world by invitation only? Anyone could sign up for a paid Spotify Premium account. On the scarcity principle, Spotify met consumer demand by offering them access at a price. Now half of Spotify’s 100 million users is paid, subscribers.
7. TOMS
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In addition to comfort and style, the popular TOMS shoes offer a great price-performance ratio: For every pair of shoes purchased, TOMS donates a pair to a child in need. TOMS goes a step further by working with other advocacy groups to share sales to serve other good causes.
Knowing that their customers are already philanthropic, the brand is a safe bet that they will want to buy shoes that benefit other uses (e.g. pandas in the example above), but they may still need a boost. So TOMS created a mini-site explaining why TOMS and WildAid are partnering, along with some fun facts about pandas and unique panda-themed shoe designs.
Once the visitor has read the entire captivating website and browsed the vegan, panda-friendly shoe options, TOMS subtly advises them that the shoes are only available for a limited time. In other words, helping cute pandas is only a limited time.
TOMS ‘approach of leveraging the scarcity complex to promote shopping and philanthropy works here.
Sometimes less is more
Invoking the scarcity principle to promote and sell a product can be an effective persuasion strategy, but you have to get it right. If you phrase product shortages as if there used to be a lot of supply but with few products left due to increased demand, consumers become more receptive. But if you phrase product scarcity in such a way that only a few product units are available at any given time, the scarcity principle will not be as effective at generating sales.
Editor’s note: This post was originally published in May 2017 and has been updated for completeness.
