Scarcity as a Marketing Tool Part 2: Working with Excess Demand

This is part two of a series exploring scarcity in marketing. Previously, we discussed the impact of limited supply. Here, we’ll dig into its flip side, excess demand, and how marketers can maximize its value.

Whenever consumer desire for a product outpaces its availability, there will be scarcity. But consumers react differently whether they perceive insufficient supply or excessive demand to be more relevant. High demand creates a powerful form of “social proof,” as psychologist Robert Cialdini termed it. When we see that others like us want something, our own desire often increases.

Examples of Excess Demand-Driven Scarcity

The are numerous real-world situations where consumers’ sense of scarcity is driven by excess demand:

• Fan communities: When fans, like sneakerheads for example, share their excitement for new releases, that creates a demand signal for other fans.
• Viral trends: The 2024 Stanley Tumbler craze was driven by social media messaging highlighting demand rather than product characteristics.
• Direct messaging: Many ecommerce sites display how many other shoppers are currently viewing an item to drive conversion.
• The Empty Shelf Effect: Empty store shelves are a clear sign that an item is in high demand—think back to finding toilet paper in 2020.

The Effects of Excess Demand

Excess demand emphasizes to consumers that there are other buyers in the market. This creates social considerations that can take different forms:

• A strengthened sense of community, especially when the consumer perceives themself to be similar to other buyers
• Reassurance, especially when considering unfamiliar products or brands
• A heightened desire not to be left out, especially for goods that are highly visible

Practical Tips for Using Excess Demand in Marketing

1. Highlight the unfamiliar: When encouraging customers to try new products or brands, draw attention to other buyers.
2. Encourage fan communities: Help create a sense of belonging among your customers and let them see one another’s interest firsthand.
3. Combine with promotions: Getting a special deal on a highly sought-after item can build loyalty by making your customers feel accomplished and savvy.

Conclusion

Excess demand and limited supply are two sides of the same coin, but they prompt different reactions in consumers. While limited supply may evoke feelings of exclusivity, excess demand taps into our desire to belong or avoid missing out. Understanding this distinction is crucial for crafting effective marketing strategies, especially in the realm of product drops.

The key to successful scarcity marketing lies in authenticity to your brand and understanding your audience. With these insights, you’ll be well equipped to create compelling campaigns that resonate with your customers.

The upcoming final installment of this series will tackle time-based scarcity. For more in-depth information, we recommend reading: Barton, Zlatevska, and Oppenwal (2022). Scarcity tactics in marketing: A meta-analysis of product scarcity effects on consumer purchase intentions. https://doi.org/10.1016/j.jretai.2022.06.003. (PDF link).