Whether we realize it or not, we’re all familiar with scarcity tactics in marketing.

The “limited-time offer” deal or “only 9 left at this price!” notification are common, effective tools for persuading buyers.

But why are they so effective? There are both economic and psychological reasons why these tactics prove fruitful.

First, the economic explanation. 

The scarcity principle is an economic theory that explains the price relationship between dynamic supply and demand.

According to the scarcity principle, the price of a good, which has low supply and high demand, rises to meet the expected demand.

Second, the psychological explanation.

Humans tend to associate limited availability with exclusivity. If something is difficult to acquire, we assume it’s because it’s better than whatever we already have.

In other words, an item’s availability influences our determination of quality of the product.

When items are scarce, we perceive them as more valuable and thus, more desirable.

Dr. Michael Lynn, a professor at Cornell, compiled a list of explanations psychologists and researchers have found over the years that examine why scarcity increases desirability:[*]

His findings can be broken down into three main categories:

  1. Scarce items feel exclusive: Think about the popularity of VIP areas of clubs or airlines with membership lounges. Those who have scarce items have exclusive access – that which is not readily available to most of us.Exclusive products or experiences elicit the “fear of missing out” or FOMO for those of us who cannot partake. Marketers can trigger that fear with messaging like “Don’t miss out on this exclusive sales event – it only happens once a year!”
  2. Scarce items appear more valuable: According to the above-mentioned economic scarcity principle, items in low supply often cost more, and therefore scarce items are typically expensive and act as status symbols.
  3. Scarce items make people feel powerful: Snagging a scarce item means you have access to something other people want but can’t have–which gives the owner power.

Consider the luxury shoe brand Christian Louboutin. Over the years, the brand has released many different limited-edition themed collections to the world. The shoes are made with exquisite craftsmanship, rare materials and offered in limited quantities each season.

The rarer the material (ostrich feathers, racoon fur, Swarovski crystals), the more exclusive and coveted they become. Their iconic red heel has become a status symbol of power and wealth.


Even if you’re not selling an $8,000 pair of pumps, you can leverage the psychological power of scarcity to persuade consumers to fill out lead forms, purchase products, or take other desired actions.

The great benefit to scarcity marketing is that it doesn’t require you to lower the price of your product. Scarcity can work in conjunction with a sale but doesn’t have to.

Let’s look at some examples that you can apply to your own brand:

  1. Limited Time Offers:Scarcity isn’t just limited to product supply. It’s often paired with the sense of urgency and can be time-based, too.A limited-time offer is any kind of discount, deal, special gift, or reward a buyer can get if they make a purchase from you during a certain time period.Offers available for a limited time only are a great way to draw people in, create a sense of urgency, and get them to convert.The danger in using “limited-time-offer” promotions is that brands often use them too There’s a reason most sales aren’t year-round. It defeats the purpose of a sale.It’s easy to measure this with email marketing. The shorter the sale, the fewer impressions you might make, but the more effective those impressions will be.
  2. Limited Edition Items:
    Limited edition items are not only available for a short time, they’re also never coming back.This technique is used a lot by makeup and fragrance companies, particularly around the holidays.In one example, Clinique highlights the fact that there are only a few of these sets available to make the buyer feel like part of an exclusive club. It also adds a sense of urgency. If you want one of these, you better act fast.Similarly, Coca-Cola is exceptional at using limited edition products. Remember the wildly popular “Share a Coke” campaign?For a limited time, Coca-Cola fans were able to buy bottles and cans featuring their name, or the name of a friend or loved one.Luth Research writes that “the limited-edition nature of this campaign gave customers a sense of urgency to find their name on a bottle — before it was too late.”
  1. In-Stock/Low-Stock Announcements
    More and more companies are using “low-stock announcements” to draw attention to the few remaining items available.In the example below, Amazon highlights “only 1 left in stock – order soon” as its call to action. And it works.

This tactic is popular in the travel industry as well. Expedia reminds users that only 1 or 2 seats remain on an airline at a specific price. Same goes for hotel rooms and excursions.

Travel companies like Expedia and Booking will also alert you when other people are viewing the same flight/hotel/excursion as you are, in real-time. This not only validates your choice (others like this one too, so it must be a good one), but it also contributes to the sense of urgency (better buy it now before someone else gets it!)

Scarcity marketing tactics are effective and easy-to-implement, and they don’t require you to lower your prices or lose profits.

They can be used alone or combined for added urgency. Try incorporating them into your next promotion and see what happens!


Sources: https://sleeknote.com/blog/scarcity-marketing