⭐️ Now, exclusive, limited: Scarcity in marketing
What do McDonald's, the Faroe Islands, Lacoste and diamonds have in common? They all work with scarcity in marketing. How does it work and how can brands use it to their advantage?
Hi 👋 I’m Florian Schleicher. This is the FutureStrategies newsletter of FUTURES. Thank you so much for reading along 💚 If you want to learn strategic marketing from me, then my Simple & Sustainable Marketing Academy is the perfect fit for you.
I wasn't always sustainable.
Before I helped shape and manage the marketing of Greenpeace and Too Good To Go, I was busy selling as many burgers as possible at McDonald's, among other things.
I always talk about how I switched from the "dark" to the "bright" side with my focus on green marketing.
But at McDonald's, I learned a lot of extremely valuable things about marketing.
Especially the art of artificial scarcity and how it can be used perfectly in marketing. And since I read the great book "The Power of Scarcity" by Mindy Weinstein a few weeks ago, I would like to share some of my learnings with you here.
So that's what I'm doing today:
What is scarcity in marketing?
Why does scarcity work in marketing?
How do successful companies use scarcity to their advantage?
5 tactics to use scarcity for Green Marketing
💎 What is scarcity in Marketing?
Entire sectors of the economy have been built on scarcity alone.
What is this about?
Every time a product is offered in limited quantities, a discount has a limited duration, something is not freely available on the market, there are only a certain number of tickets, a special edition is released - then we are talking about scarcity.
“When an item is scarce because of high demand versus other circumstances, the perceived value is even stronger. It creates a feeling of urgency based on the belief that once the products are sold out, the chance to own the product is gone forever. It propels us to do something immediately.
Mindy Weinstein, The Power of Scarcity
Free markets are defined by supply and demand. If there is more demand than supply, then sellers, i.e. companies, have a strategic advantage and can also work with this in marketing.
When I was Head of Marketing at Too Good To Go, we launched in August 2019 with 23 companies that saved food with us. Soon after the launch, there were thousands of users. We unintentionally made the market scarce and wanted to create a balance as quickly as possible - precisely because Too Good To Go generates revenue with every sale and we therefore needed a lot more supply to boost our sales. What it did bring us, however, was hype about the available supply. And the most popular restaurants, bakeries, and hotels are still selling out quickly.
One of the historically well-known examples of deliberate scarcity comes from the diamond company De Beers, one of the leading names in the industry.
Thanks to De Beers, diamonds became a symbol of love:
In the 1930s, De Beers launched the famous "A Diamond is Forever" campaign, which not only established the romantic link between diamonds and love, but also reinforced the idea that diamonds have lasting value.
In the late 19th century, large diamond deposits were discovered in South Africa, where De Beers mined a large proportion of its diamonds. This discovery could theoretically have led to an oversupply, which in turn could have caused prices to fall.
To prevent this and keep prices at a high level, De Beers decided to take control of the diamond market. They created a monopoly by controlling not only the mining of diamonds, but also the marketing. The introduction of the "A Diamond is Forever" campaign in the 1930s strengthened consumers' emotional attachment to diamonds and created the impression that diamonds have lasting value.
The skillful combination of diamonds with emotions and the strategic handling of scarcity have made De Beers a pioneer in the diamond industry and have had a lasting impact on the market.
De Beers has discontinued this tactic and campaign since the early 2000s, but we still value diamonds as an extremely valuable resource.
What has remained, however, is that resourceful marketers are still working with the element of artificial scarcity.
But what is the psychology behind it?
🤔 Why does scarcity work in marketing?
Scarcity works because we humans are more afraid of loss than we are of gain:
“The idea that something can be here today and gone tomorrow drives most of us crazy and it’s what makes scarcity such a powerful influence in how we make decisions. Fear of not having something has existed for time immemorial.”
Mindy Weinstein, The Power of Scarcity
We are afraid of losing a deal and having to pay more afterward or even worse - our desired product/service is no longer available.
The effect of scarcity can be summarized quite simply:
“The less available something is, the more people will want it.”
Contagious Magazine
An interesting example of this is the closing time effect, which influences why we often find people more attractive at a later hour than at the beginning of the night:
“Studies in 1979 concluded that closing time threatened the freedom to choose someone to be with later, and consequently, those remaining in the bar increased in desirability and attractiveness.”
James W. Pennebaker et al in “Don’t the Girls get prettier at closing time.”
So when potential partners are perceived as less available, their value and desirability increase. Put simply, research has shown that we find someone more attractive and desirable when that person is not available to us. However, as Mindy Weinstein writes, there must first be a certain level of interest.
This principle is also the reason why anti-smoking campaigns have been using shocking images of dying and sick people for years - fear is the strongest motivator to change behavior.
We are afraid of no longer getting what we want.
“Our reaction isn’t because we desire freedom; it’s because we fear its loss. Therefore we become motivated to restore what we feel is the freedom to choose.”
Rosenberg, B.D. and Siegel, J.T., A 50-year review of psychological reactance theory
Fancy a quick self-test?
Think briefly about something you would like to have. Maybe a book, an item of clothing, a movie ticket, a sports experience.
Imagine you only have 15 minutes to decide whether you can have it at all.
What do you do?
According to studies, this shortage has several effects on us:
We skip the normal steps involved in making a purchase decision.
We no longer seek out additional information to help us decide whether to buy something or move on.
We are no longer confronted with competing products and offers because we are no longer looking for them.
Instead, we are forced to buy immediately and on the spot.
That's great for companies.
Would you like to use scarcity as part of your marketing strategy?
I am happy to help you with this with my marketing studio FutureS.
Simply contact me directly here or take a look at who we work for.
That is why I would now like to describe 2 examples of how successful companies use scarcity to their advantage.
🍔 It’s promo time
And that brings us back to my former employer, the big burger chain. Have you ever wondered why McDonald's launches different creations and products every month?
Dean Barrett, retired Senior Vice President of Global Marketing at McDonald's, describes in "The Power of Scarcity" how the brand uses limited-time offers to build brand affinity and loyalty while encouraging interaction with customers.
McDonald's has a 60-year history of doing things that are fun and exciting and creating trends that connect with people's lives and what's happening around them, whether it's in the form of food or limited-time promotions tied to big events like sporting events or major movie premieres around the world.
The opportunity to make limited-time offers for customers has become part of the brand culture. McDonald's uses limited-time products to surprise and delight customers.
For the company, time-limited offers are not about the spontaneous question "How much can I sell?", but "How can I connect customers with the brand and become part of the culture?" This approach leads to lasting brand affinity and a connection with the customer's life.
McDonald's deliberately issues limited-time offers based on customers' current wishes or those they have expressed in the past. If a previous limited-time offer was popular with customers, McDonald's considers offering it again and in many cases has offered it repeatedly. However, it is also possible that the limited time offer is removed after a certain period of time in order to continue to surprise and amuse customers. In a way, the sporadic launch leads to a treasure hunt for fans.
As a result, McDonald's has customers puzzling over the launch of the McRib or their favorite Chicken McNugget and even demanding them.
I remember well when I was a child and always wanted a Happy Meal (then called a "junior bag") to get the exclusive toy and complete my collection.
We also saw this at the beginning of COVID:
"If consumers think there is a shortage of a product, or that it won't be around for long, they will rush out to get it. Think of the Great Toilet Paper Shortage in 2020 and how many people rushed out to get some the moment they thought they might run out."
Scarcity marketing almost always works.
Starbucks has also cleverly incorporated this into its annual calendar - or to put it another way:
🎃 It’s Pumpkin Spice Latte Time
For a drink whose contents never saw a pumpkin in its first 10 years, the coffee company has been making quite a splash around the product for over 20 years. Mindy Weinstein describes the story of the product launch:
The Starbucks team responsible for selecting the flavors brainstormed and came up with 10 product ideas. The team had customers taste the new drinks, and the pumpkin drink fell in the middle of the spectrum. At this point, there were no drinks with pumpkin. The team decided to take the pumpkin idea further by creating a "liquid lab" of Thanksgiving-related items, including pumpkin pie, to cultivate the feeling of fall. At the time, it was mid-January. The company experimented with different autumnal flavors and decided on a recipe that didn't actually contain any pumpkin notes (to make a long story short, the drink contains no pumpkin at all); nevertheless, Starbucks named the drink "Pumpkin Spice Latte PSL".
In 2002, the PSL was tested in Vancouver and Washington, D.C.. Within a week, sales skyrocketed, exceeding original projections. Starbucks struggled to keep up with inventory. Ten years after its launch, Starbucks had sold around 200 million PSLs.
In 2019, there were around 424 million worldwide.
The drink that almost didn't make it to market has become the king of limited-time seasonal drinks and has sparked a pumpkin spice movement. The hype surrounding the PSL is a prime example of how a limited-time supply leads to the perception of scarcity. The drink is only available for a limited time each year. Customers know they have to act before it's gone. The popularity of the PSL prompts us to follow the behavior of others and get caught up in the frenzy as well.
However, neither Starbucks nor McDonald's are purely concerned with the direct sale of the products in short supply, as the other products are also bought more frequently:
Starbucks locations nationwide saw in-person visits increase by 25.7% in the week post-launch in 2022.
The promotion of the "Unicorn Frappuccino" in 2017 was similar:
Consumers created over 150,000 Instagram posts for a promotion that only ran for 4 days.
However, the drink had a bigger impact on Starbucks' bottom line: compared to the previous period, total store sales were up 4% year-on-year.
And that brings us to sustainability - because those first two companies certainly aren't.
🏖️ We are closed for the weekend
The tourist office, Visit Faroe Islands, claimed it was closed to all tourists for a weekend for maintenance.
Since 2018, several tourist attractions on the Faroe Islands have been closed to regular tourists for two days, but open to volunteers - or voluntourists - who want to help with maintenance. Over the course of two days, visitors help shape the future of sustainable tourism on the Faroe Islands.
The Faroe Islands are a series of 18 windswept islands in the North Atlantic. Until recently, this rugged island chain was quite unknown in the world. Travelers have begun to discover its incredible nature. The aim of the annual "Closed of Maintenance" project is to preserve all the pristine qualities for which the Faroe Islands are known today.
The initiative is led by Visit Faroe Islands and is part of a larger effort to preserve the Faroe Islands as one of the most pristine and least polluted places in the world. The conservation project contributes to responsible travel and gives the local population a positive feeling in the midst of growing tourism.
Visit Faroe Islands invites volunteers from abroad to join 40 local volunteers. The first 100 volunteers will be offered free accommodation, food and transportation in return for their help.
This initiative attracted a great deal of attention in the media. It managed to combine sustainability with scarcity. Thousands of people applied for one of the 100 invitations, which was also advertised with a PR-friendly video including an appeal by Faroese Prime Minister Aksel Johannesen.
The campaign generated a media value of over €500 million.
🐊 Endangered Animals Special Edition
One of my favorite campaigns on scarcity and sustainability was implemented by Lacoste in 2018 and again in 2019.
The clothing company is not necessarily a green marketing pioneer. But they have implemented an extremely strong campaign around endangered species.
As part of International Biodiversity Day on May 22, they have replaced the iconic crocodile on their polo shirts with other endangered species.
In selected stores, the crocodile disappeared from the store for 24 hours and was replaced by an endangered animal. And for each polo with a different animal, there were only the number of shirts still available of that animal species.
A few examples:
In the store on the Champs Elysée in Paris, there were 589 specimens with the Iberian Lynx. There are still 444 examples of the the North Atlantic Right Whale in the world, whose counterparts were sold in the store on Broadway in NYC. And 1,400 polo shirts featuring the Hawaiian Monk Seal could be purchased in the webshop at Lacoste.com.
The campaign went viral on social media and quickly made its way into the mainstream press, leading to worldwide television coverage within days. People were lining up to get their hands on a copy. Needless to say, all the polos were sold in less than 24 hours.
Following the campaign, a call for proposals was published for projects relating to one of the ten species.
Three projects were awarded the Lacoste funds: one project to protect the endangered Burmese Roofed Turtle, another to protect the endangered Mountain Chicken and another to protect the endangered North Atlantic Right Whale.
In my opinion, the Lacoste X Save Our Species capsule collection is a great example of how a company can integrate species conservation into its core business in a way that fulfills its corporate goals and at the same time stands up for nature.
Because even if the company isn't 100% green, its customers have been made aware of the issue and the media impact around endangered species has been huge.
And one last sentence about scarcity: the polo shirts are sold on eBay from €500. A multiple of their original price.
🧩 5 tactics to use scarcity for green marketing
If brands want to address the topic of sustainability authentically, courageously and strategically, then it is clear that they should also work with scarcity.
Especially because it is about the ultimate scarcity: our resources, our lifestyle, our natural climate are being lost. And we don't even have enough resources to complete the planned turnaround.
This raises the questions of why green politicians don't have a home game, and why sustainable companies don't dominate the market and take consumers by storm.
Lacoste and the Faroe Islands have demonstrated the incredible potential of this marketing tactic.
There are more and more sustainably-minded consumers who are also happy to spend more money on a greener lifestyle.
So here are my 5 points on how green marketing can be used for sustainable behavioral change.
Limited editions and collections: The introduction of limited editions or collections of sustainable products can create an artificial scarcity. This can help to arouse the interest of consumers as they have the feeling that they are buying something exclusive and unique.
Seasonal limited offers: By offering seasonal products or limited offers, companies can emphasize limited-time availability. This creates urgency and can motivate consumers to buy sustainable products sooner, as they may be afraid of not being able to get them later.
Sustainable rarities: Companies can emphasize the uniqueness of certain sustainable materials or manufacturing processes to create the impression of rarity. If consumers feel that certain sustainable aspects are rare and desirable, they are more likely to choose these products.
Waiting lists and pre-orders: The introduction of waiting lists or pre-order options for sustainable products can reinforce the perception of exclusivity. Customers who put themselves on such lists have the feeling that they are buying something special even before it is generally available.
Transparent communication about limited resources: Companies can communicate the scarcity of resources transparently to promote appreciation for sustainable products. For example, if a company relies on limited environmentally friendly materials or renewable energy sources, it can disclose this.
Of course, that's not all.
Even if a company doesn't have a marketing budget as large as McDonald's, the same principles can be applied to its products and services. Almost any product or service can be turned into a limited-time offer - the trick is just knowing the exact methods that best suit your target audience.
To use scarcity perfectly as part of a marketing strategy, there are still some key elements we need to consider.
But more on that another time.
Thanks for reading!
PS: You can also read this posting in German.