Scarcity of Products to Create Demand

Wednesday, October 29, 2014

Creating scarcity in marketing is a common practice. Consumers tend to be more attracted to items that are not readily available. Creating a scarce supply of a product can sometimes lead to an increase in demand, which is the scenario marketers intended to create. One of the main goals of marketing is to increase the demand of a product, and with this strategy new products and limited edition products are created to mimic this strategy. Scarcity of products has been viewed as a successful marketing practice; it motivates consumers to make an immediate purchase in addition to generating a buzz around the scarce product. - Chelsea 

As with any other practice, there are pros and cons to this strategy.
           
Pros:   1. Drives Sales
                        2. Creates consumer engagement
                        3. Experimentation
           
Cons: 1. Weaken Brand Reputation
            2. Can seem like a scam
            3. Customers uninterested in being rushed


Creating Scarcity of Products to Create Demand:

1.     Make the stock number visible to consumers
2.     Inform consumers that you are low in stock
3.     Limited-time ONLY
4.     Seasonal






 Source: Propelad


Scarcity Marketing – Nike & Adidas
Footwear giants Nike and Adidas use scarcity marketing through the release of limited-edition footwear. The firms appeal to the sensibilities of “sneakerheads,” a profitable sub-demographic for marketers today. The concept of limited-edition sneakers boosts demand by creating a sense of urgency – it makes consumers fearful of not acquiring a particular shoe if they don’t act fast. Scarcity (real or perceived) makes a product more desirable and in demand. It not only increases the value of the product, it motivates those who want to be part of the trendy crowd to step and buy.

adidas Originals SL 72 Limited Edition

Limited editions also create powerful branding. New product launches create massive buzz, making consumers eagerly anticipate the hottest new release. Also, this form of scarcity marketing has created a highly lucrative second-hand market where special edition footwear sells for three to five times the cost of retail.
 Nike Cristiano Ronaldo Special Edition Boot


 adidas Stan Smith Shoes


 Nike CJ181 Megatron shoe collection


Nike Air Yeezy II

-Leo

Scarcity Marketing: Macy’s and Nordstrom
Scarcity marketing is an effective form of marketing since it urges consumers to purchase now rather than later. Consumers are more likely to purchase if it is advertised that items are: limited quantity, limited edition, or as having a featured price for a limited amount of time. There are several companies that utilize scarcity marketing. Two fashion retailers that successfully use scarcity as a way to drive among consumers are: Macy’s and Nordstrom. 
Nordstrom implements scarcity marketing through their Nordstrom Rewards program. Consumers that have the Nordstrom Rewards card are offered special, final markdowns days before the sales are offered to the rest of the public. Users are able to log onto Nordstrom’s official website and view such exclusive sales virtually and immediately. Such a program is a creative and successful way to reward loyal customers.

Macy’s is known for their constant supply of discounts and sales. However, their DoorBusters are one of their more exclusive offers. DoorBusters are special offers available in-store for a limited time the morning of the sale. This is a great promotion to increase traffic in desired time frames of the day when it is generally not as busy. 

Source: MindWhirl

- Sandy

Black Friday

Black Friday, the day after Thanksgiving, is one of the major shopping days in the US. This is a day where retailers mark down items significantly for shoppers and officially ring in the upcoming holiday season. The term “Black Friday” was coined in the 1960s to mark the kickoff to the Christmas shopping season. “Black” refers to stores moving from the “red” to the “black,” back when accounting records were kept by hand and red ink indicated a loss and black a profit.


Today, it seems as though retailers compete to release holiday deals before Black Friday, but they all still participate in providing a scarce number of products in order to create demand. They release ads weeks and sometime months in advance to inform consumers that a limited number of items will be available at deeply discounted prices. Shoppers have been seen lining up days in advance at stores like Best Buy, Target, Apple, and Walmart. The limited-time-only nature of Black Friday triggers an innate fear of scarcity that drives people to buy.



Source: LiveScience

- Vanessa 

Seasonal Products 

            Making products seasonal or having a product that has the potential to be in demand at a certain period during a year makes scarcity part of a brand’s marketing campaign. Releasing products on a seasonally builds anticipation and drives customers to buy from a store. Starbucks is one company that does this every season. They launch various drinks during a certain time so customers have something to look forward to each season. One of the brand’s most prominent seasonal drink is the Pumpkin Spice Latte. It is highly anticipated and customers go out of their way to buy it throughout the fall season. During the winter season, Starbucks releases the Peppermint Mocha Frappuccino and other holiday flavors as well. In order to compete, McDonald's McCafe also releases seasonal drinks that are similar to those served in Starbucks because they learned that using scarcity as a strategy is a great way to engage with customers and increase sales.





Sources: Google & blog.propelad.com

- Ashley

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