Fear of missing out (FOMO) is a very powerful motivator when it comes to making deals and using scarcity to sell plays right into it:
“That sofa was the perfect color, the exact size I needed, and the price was a steal; but I couldn’t get there fast enough. Somebody scooped it up before I could get to it.”
You can bet that person will act swiftly and decisively the next time they see a great deal like that one. If you’re thinking to start a furniture business, when you can convince shoppers they’re looking at “once in a lifetime” deals they’ll often buy without delay.
But that’s just one strategy for using scarcity to motivate shoppers. Here are some others.
“For a limited time (or a set number of items), we’ve been authorized to offer this product at the exceptionally low price of $X.xx. This price will double when the sale ends.”
Presented with a proposition of this nature, anyone who was intending to make a buy will be enticed to take advantage of that deal before it goes away. While the item itself might not be scarce, the opportunity’s finite timing introduces the idea of scarcity. This works particularly well for grand opening sales. It’s also a good play when you need to build buzz around a new product or generate testimonials to promote the item going forward.
“The first 200 customers who purchase this sofa, coffee table and end tables package will receive a pair of matching lamps for free (or at a substantial discount).” This strategy combines a limited time offer with a free gift or the chance to get another product at a heavily discounted price. If a shopper is on the fence about the purchase, this could well tip them into making the buy. After all, if they’re considering a new sofa and table set, they’ll probably need to get the lamps anyway. This represents an opportunity to acquire everything at a lower price than they would see if they waited. The scarcity element lies in the fact that offer is limited to 200 deals.
Aura of Exclusivity
Louis Vuitton produces some of the most expensive handbags on the market. Meanwhile, they are also some of the most commonly carried—and most often by women whose incomes do not necessarily justify the purchase of them. They buy the bags because of the aura of distinction a Vuitton purse radiates.
Here, the principle of scarcity is tied to the perceived exclusivity of the product. The thought process goes, “When people see me carrying this handbag, they’ll think I’m doing well—even if I do only have three dollars and package of Tic Tacs in it.” This is the hook upon which the sales of mainstream luxury goods rely.
Time, Rarity and Price
Online sellers Groupon and eBay have mastered the idea of combining a narrow time frame with rarity and discounted pricing beautifully. Most auction items on eBay are one of a few available, so once they’re gone, they’re gone. Meanwhile, you have a restricted amount of time to make the purchase and you have to outbid other shoppers to do so. This is a merchant’s wildest dreams come true. Similarly, Groupon discounts are available only for a limited amount of time and restricted to a certain number of buyers who must act fast to take advantage of the deal before they’re gone.
These are just a few methods of using scarcity to sell. However, you must keep in mind such promotions have to be sincere to work. Implying scarcity where none exists (like the rug shop in your town that’s been “going out of business” since 2007), will come back to bite you.