What is Scarcity?
Scarcity is the name given to a psychological principle (or heuristic) that describes how we want something more when we can't have it, or we think it's becoming more difficult to obtain. It's one of the most fundamental of human biases that we can’t escape, even when we know what’s happening, and it is apparent all around us:
- Gold is rarer than Silver, so we place more value on it
- A first edition book with only a few copies left in existance is more sort after than the modern print version
- The Black Friday sales see people fighting to get to the offers before they’re gone.
When we come to learn that something we desire is running out, somewhere deep inside our primate brain an urge starts to swell that increases our desire for it further. That’s Scarcity in action, and clever marketers know how to trigger just the right spot to start the swelling.
The cookie experiment
If you’ve looked into the science of Scarcity before, you’ll have almost certainly come across the famous cookie experiment.
In 1975, a psychologist called Stephen Worchel ran an experiment with 200 undergraduates which involved 2 cookie jars. One was full of cookies (abundant) and kept topped up, the other had very few cookies inside (scarce). Through a series of tests it was found that the cookies in the scarce jar were overwhelmingly deemed more desirable (even though both jars included the same type of cookies).
Another famous study was conducted during which women were shown photographs of their ideal male partner. Half the women were told he was single and the other half told he was married. They were then asked to judge how interested they would be in pursuing him. Of the single guy, 59% of women were interested, but that figure increased to 90% for those who were told he was married.
Lots of similar experiments can be found all designed to test how much we desire things that are harder to obtain and the results are broadly conclusive. If its rare or harder to get, we want it more than it would be otherwise.
How Scarcity is used in marketing
Knowledge of Scarcity is nothing new and marketing folk have been using it to increase sales for a long time. The basic principle is always the same (let the customer know there’s short supply) but that can be wrapped up in different ways.
- “Stock running low, get it while you can” - This kind of statement directly tells you there is low stock and suggests once it's run out, there won't be anymore to replace it.
- “Limited time only” - Limited time offers, suggest the deal you are looking at has an expiry date and if you don't act fast, you might miss the opportunity.
- “Only X per customer” - A slightly more sophisticated version puts a limit on how many you are allowed to purchase. This might seem counter intuitive but studies have shown this type of framing to increase sales overall. It subtly suggests there is low stock and the retailer has decided to rashion what's available between customers. This is enough to get your sub-conscious thinking that you might need more than you would of originally wanted in the first place.
- News of shortages - Learning of shortages in the supply chain can be a big driver in demand. We’ve seen it recently with all sorts, from Petrol to toilet roll. A classic example where this is leveraged for marketing purposes is around Christmas toys and games. Buzz Lightyear sales skyrocketed in 1995 (the year Toy Story was released) when word got out that there wasn’t enough toys available to meet demand.
How Scarcity increases online sales
In eCommerce sales and digital marketing in general there are 2 main ways scarcity is deployed to nudge users into buying decisions:
- Low stock hints
- Time based discounting
Time based discounting
Time based discounting is what most people are familiar with. A special offer is created and you have a certain amount of time to redeem it.
Here, Uber are employing The Scarcity Principle several times in their copy to really push the message home:
- The email subject line “Final call to save up to £15” - Suggests this is the last opportunity if we want to take advantage of this deal.
- The email header “You’re missing out on up to £15 off” Tell’s us if we don't take action, we’ll miss out (and who doesn't hate missing out on something)
- The email copy “Time is ticking…” Reasserts that this is a limited time offer and we don’t have long if we want in.
So Uber are really stacking up the scarcity hints to hammer home the message and it undoubtedly increased signups for that promotion.
Low stock hints
Low stock hints are where retailers tell you how many are left in stock of a particular item. It's usually placed near the add to cart button as a hint and is more likely to prompt a sale when the number is lower. Amazon were real pioneers with this tactic on their book sales “only x left in stock” and it was hugely successful for them. Now of course we see it all over the internet.
Booking.com employ this tactic well. They tell you exactly how many rooms are left with some subtle copy that leverages scarcity:
- “Only one room left” - Tells us there is limited supply
- “at this price” - Suggests if we don’t act now the price may increase
- “lock in this great price today” - Gives you the opportunity to grab a deal (but only if you move fast)
Next.co.uk employ scarcity by showing you which sizes of an item are out of stock. This suggests the item is a hot product and selling out fast. Subconsciously, your brain is triggered into thinking you must move quickly to grab what’s possibly one of the last available in your size, before anyone else does.
Can you avoid Scarcity?
So now you understand the Scarcity Principle and how it's used to nudge you towards buying decisions, you’d think you’d be able to avoid being manipulated by its effects, right? Well sadly no I'm afraid. Robert Cialdini lists Scarcity as one of the 6 primary drivers of persuasion in his best selling book ‘Influence'. In it, he suggests even if you know how it works and see the signs in front of you, you still cannot help but be influenced by its effects. It’s that powerful of a driving force, us humans are powerless to defend ourselves against it.
So, Scarcity is a deep rooted evolutionary trait that triggers feelings of desire in all of us. Those precious rare items are just too tempting to resist.
If you're interested in learning more about how Scarcity or other psychological triggers are employed in web design or online marketing, get in touch.