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Running an eCommerce Business

How to Use Scarcity to Create Demand for your Products

How to Use Scarcity to Create Demand for your Products

by John Larkin

John runs the blog here at eCommerceLift and is a verified Shopify Expert. Interested in an initial growth consultation? Click here

A year ago


How to Use Scarcity to Create Demand for your Products

Getting customers snapping up your products can be a struggle. Customers very rarely buy a product first time as they come to your store while others come and just leave an abandoned cart. This can result in a long, drawn out sales process with customers contemplating buying from your store for days, weeks, months… Most merchants want a snappy sale that involves customers coming and buying without hesitation.

Although you can’t always get this immediate sale, there are ways to get customers to buy fast and raise demand for your product. One of these is scarcity. This common marketing technique has been used for years to raise demand for products.

Throughout this post we are going to discuss scarcity and how eCommerce stores can use this marketing tactic to help grow their store.

What is Scarcity? 

First, let’s explain what the concept of scarcity is and how it is relevant to marketing your store.

Scarcity is the process of manufacturing or stocking a product limited so that it will create higher demand. The logic is that customers will see that the product is of restricted availability, fear they will miss out and therefore be driven to make an immediate purchase.

It is often used when companies launch new or niche products as it is very successful at motivating customers to make an immediate purchase while also building excitement around a product. 

It has been used ubiquitously for years.  From Beyonce tickets to the Harry Potter books to Furbies, these all have used scarcity and it often effective marketing strategy that businesses use.

The Pros & Cons

Although using scarcity tactics can offer substantial benefits for your brand it does come with a few draw backs as well. It’s just a case of measuring the pros and cons to see if it will work for your store.

Pros

  • Drives sales: The most universal reason to use scarcity is to increase sales. Scarcity has a proven track record to boost sales and it make customers buy immediately as they perceive the value of the product to have risen due to the limited amount. 
  • Fan engagement: Implementing a scarcity tactic can increase customer engagement. It can be used as a hot topic on your social media and gets customers sharing and communicating about your brand.  
  • Experimentation: Scarcity can be used as a way to test experimental products. Buying a limited amount and building a scarcity campaign around it can prove if there is actually an audience for your product and what reaction customers will potentially have to an unsure launch. 

Cons

  • Diminish brand reputation: Using scarcity can diminish your brands reputation as you can become a store that is seen as using gimmicks to sell your brand if used too often. 
  • Can be perceived as a scam: If you use scarcity and then immediately restock customers will view this as dishonest. They will feel tricked into purchasing and lose interest in your business.  
  • Some customers may be turned off: Some customers simply don't like to be rushed. They prefer to let the idea of buying your product marinade for a while before jumping in therefore using scarcity may turn these customers off your store and lose a potential sale.



How to Create Scarcity for your Store 


Show Customers your stock numbers

When using scarcity, it doesn’t have to be blatant or flashy. One of the most common methods is to place the number of stock that your store has left on the product page for customers to see. This will create urgency for customers as they will see that there are only a few products left until the opportunity to buy is gone.

Ebay often use this to get people buying as they display stock numbers on the products their merchants have for sale. It is effective at creating a sense of urgency as a number that is continuously clocking down could mean that a customer will lose out on their product.


Tell customers you are low in stock 

Similar to having stock numbers is to simply tell customers an item is low in stock. This can be a signal on the product page that suggests that your product is nearly sold out or through email if a customers has abandoned their cart to get them back to your store. It’s simple but effective as customers will feel the need to immediately buy before the product disappears.

ASOS expertly let their customers know by indicating on their product page when a product is low in stock. It pops up when an item is added to a customer’s basket letting them know this may be their last chance to purchase so it is best to do it now


Make it Limited Time Only 

Scarcity doesn’t have to be specifically related to stock as using offers, promotions and deals are a great way to get customers buying but adding a time crunch is a great way to use scarcity to drive customers to use them. Placing a set date for an offer to expire can be a great enticement for customers to buy and is one of the most popular ways to use scarcity online with so many eCommerce stores incorporating it into their marketing plans. 

The furnishings company Deny Designs has on occasion used this tactic to encourage customers to snap up their products. They use promotion codes, limited time only sales to get customers motivate to get this great deal within a certain time frame. 
Make things seasonal

If your product is seasonal or you have a product that has the potential to be in demand at a certain time of the year that make scarcity part of your marketing campaign. Releasing products seasonally, building anticipation for it and only allowing it to be available for a certain period of time can really drive customers towards buying from your store.

Starbucks have become synonymous with doing this as every season they launch different drinks that customers every year look forward to. Most prominent is the brands Pumpkin Spiced Latte which is high anticipated amongst fans and gathers quite a following with customers clamoring to buy if it throughout October before it disappears for another year.

 Using scarcity for your store could be a great way to engage with customers and increase your sales. However, it has to be delicately done so that your customers believe they must buy this product now. If executed perfectly, it could be a marketing strategy that will help grow your store.

Let us know your experiences are with scarcity and whether you think it’s right for your eCommerce store

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