Chapter 9 of PSYCHOMarketing by Roger Nichols
Scarcity marketing utilizes another psychological effect, one based on the principle of scarceness. To be candid, all buying and selling activities in the world are based on this concept. In my opinion, scarcity should be the only rationale for making sound economic choices among producers, marketers, and consumers.
This psychological effect is prompted in customers when marketers create a sense of urgency in their sales pitches. This works because we are all familiar with the feeling of a deadline to a particular task or product. When faced with such a deadline, we are most likely to act quickly.
Not even amazon can provide all the goods desired. Thus, the creation of scarcity marketing. It builds on the consumer’s anxieties or apprehension of the perception they are losing their freedom of choice. It feeds the fear that consumers have that they are losing out on a particular deal they perceive to be a “once in a lifetime” or favorable one. This commonly occurs when a product isn’t readily available; as a result, it suddenly becomes more attractive.
Many marketers use this principle to make massive sales. In many instances, it is used in conjunction with a price slash or discount that has a time-lag attached to it. Some marketers think the discount is the trigger that induces consumers to purchase their products, but it is actually the urgency of the price slash: the potential of losing out on an offer plays a significant role in how customers make their purchasing decisions.
I’ll bet you have purchased a product because you were motivated by the possibility of losing out on such an offer—maybe even more than a few times, right? Familiar examples are the infamous Black Friday, Cyber Monday, and now “amazon days.” On these days, people wake up very early, get in line for many hours on often cold, even freezing mornings without even raising an eyebrow, merely because they want to lay their hands on that new Samsung freezer or Apple computer that’s on sale for $200. Maybe they set their phone alarms to let them know when the online sales start. In scarcity marketing, marketers take advantage of the fear of missing out (FOMO) that consumers have. As you can imagine, scarcity marketing also relies on social proof.
In some cases, products are actually scarce because the materials required to produce them are costly or scarce. Other products are scarce because of the price, which stems from the value placed on such products by society. However, marketers can also create a sense of scarcity for a product that is not, in fact, scarce. They will select a product, reduce the price, and attach a time-lag for the reduction in price, thus making that product scarce at that moment.