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How Scarcity Wields Influence For Brands

by Mindy Weinstein

Persuasion engages innate human responses. When used as an influence tactic, scarcity can change beliefs, attitudes, or behaviors due to actual or perceived pressure. Social psychologists have been especially interested in scarcity and influence because it can cause significant behavior changes and result in people making decisions they otherwise would not have made. Items have a greater appeal when their availability is limited or restricted.

We see scarcity often with infomercials, as time is limited to take action. During a conversation I had with Kevin Harrington, an original “shark” on the TV show Shark Tank, creator of the infomercial, and Pioneer of the As Seen On TV industry, he talked about this concept. He explained, “I was introduced to this whole scarcity way of selling back in the early 80s. Not only was I exposed to it when selling on Home Shopping Network, but also when selling on infomercials. We would sometimes say you must order within a certain period of time to get the product or special offer.” With this language, a sense of urgency was created.

Even 40 years after his initial introduction to scarcity selling, Kevin explained that he still sees this concept in action. For example, we talked about big celebrities, such as the Kardashians, and how they use a newer form of scarcity referred to as a “drop.” The Kardashians might tell their audience that they will put 10,000 pieces out tonight, but once they’re gone, they’re gone. Within hours, the products sell out. We see the same thing with a growing number of brands, including Nike, Supreme, Off White, and even Amazon, which has a program where influencers curate a collection of clothing that is then available for shoppers for 30 hours or less. Guess what Amazon calls this program? The Drop. No matter the phrasing, it sounds very similar to what has been done for decades within infomercials and shopping channels.

On the flip side, companies that participate in such drops that tout limited quantities know that over time, they can’t continue to drop or promote the same product over and over again. If they did, the effects of scarcity won’t exist. That is where limited-editions really shine. Home shopping networks have taken a creative approach to this concept.

“QVC might sell the same product for multiple years and each time it is offered, it sells out. Eventually, we might make it a limited-edition by offering a slightly different version of the original product. For example, if it was a 9-piece cookware set, we might make it an 11-piece cookware set by including 2 more lids. It is now a limited-edition product,” explained Kevin. The brilliance of this variation in the cookware set, is that it is also instantly different than what other stores might be selling.

In advertising, scarcity appeals highlight features associated with the uniqueness, rarity, or unavailability of a product or opportunity. Technology, including social media and other digital sources, has only served to foster this type of influence tactic. As a result, scarcity has become a mainstay approach in marketing and psychology because it tends to improve the effectiveness of advertisements and sales pitches, and changes behaviors and attitudes.

Scarcity Affects The Brain

Not only has scarcity been studied from a psychological perspective, it’s also been examined from a neurological lens. With advancements in neuroscience, researchers can now see the activity in our brains when faced with scarcity. That is exactly what happened in a 2019 study when participants bid on products in an auction simulation. When the products shown were positioned as scarce, fMRI scans showed that the area of the participants’ brain (i.e. orbitofrontal cortex) that is associated with valuation processes had a rise in activity. Participants consequently bid higher on scarce products than non-scarce products. From this study, we know that scarcity can quickly trigger the evaluation of a product’s value and result in a swift decision.

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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