I was sitting with my friends and planning a trip. We had our laptops open, and everyone was excitedly debating which hotel to book. We found a great option on Agoda. It had a good location, a decent price, and met our needs perfectly. Then, a little timer popped up on the screen, warning us that we had only 19 minutes to grab a 20 percent discount, after which the deal would disappear. The clock was ticking, and no one wanted to be the reason we missed out. So, we went ahead and booked it. Later, we discovered that the timer wasn’t real. Every person who opened that listing got the same 19 minutes and the same discount. Agoda just wanted us to think that the offer would disappear, and it worked in their favour.
This reflects the scarcity principle, one of the oldest ideas in consumer psychology. Limited availability increases a product’s perceived value and appeal. Robert Cialdini, the psychologist who wrote a book titled Influence: The Psychology of Persuasion, suggests that people assign more value to things that are less available. Limited supply implies exclusivity, which in turn, increases desirability. Let us look at some brands who have mastered the psychology of scarcity:
Firstly, the reason why Hermès produces fewer Birkin bags is not that it takes a lot of time for them to produce. In fact, their product becomes unique and expensive precisely because it is scarce. It is what makes it desirable because it is costly and limited in supply.
Secondly, when OnePlus entered Indian markets in 2014, the company did not have any money to spend on marketing, and it also had to deal with strong competition such as Samsung and Sony. Instead of spending on advertising, OnePlus chose storytelling for its marketing technique. The company had decided that in order to create hype, they would use an invite-only sales technique. The effect of this marketing strategy was amazing because on one sale day, OnePlus received millions of visitors on its website. That particular day saw a huge rise of about 226% compared to the average number of visitors per day in the previous month.
Flipkart has also followed a similar strategy and created an annual festival on this principle. During Big Billion Days, Flipkart used the countdown clock, flash sales, and low inventory alerts. Items were labeled “Only a Few Left” to create an air of scarcity and convince the customers to make purchases rather than wait until they lost their chance. And on the very first Big Billion Day back in 2014, Flipkart sold $100 million worth of products in just 10 hours.
So the next time you encounter a countdown or a tag that says there are only three items left, take a step back and think… Is this product really scarce, or has someone managed to convince you? The difference between true scarcity and creating an illusion of urgency is often a thin one, but no one can stop any multibillion – dollar business from using this approach.
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