In an experiment conducted in 1975, participants were asked to rate a cookie they ate. They are 2 type of participants, the first type is the participant who handed a jar that contained 10 cookies (abundant supply), the second type is the participant that handed a jar that contained only to 2 cookies (scare supply). The results showed that the same cookies will be rated different way based on the condition or the way it’s presented. In the scare condition, the participants rate the cookie way higher than the participant in the abundant condition.
Scarcity happens, when limited (less) supply and high demand are met, that usually results in an increased attractiveness of the product/service. The more scare or the less available the product is, the more attractive and the more value the product carries.
For example, a car that is labeled “limited” is way more expensive than the regular car in the same product series. Even though the changes are just some minor changes like color, additional body kit, etc.
But the availability is not the only elements of scarcity. The number of people who are wanting to get the product also significantly influences the scarcity. The more people who are interested to get the product, the more value the product carries.
There is another similar tactic that companies use, it’s called urgency. It’s very similar to scarcity, but in this case, it’s specific to the limited time that gives people the sense of urgent/limit of the product. The purpose is to make us think less that makes us take action quickly (triggers short-term thinking).
This picture is truly the perfect picture that represents how companies use scarcity effects and urgency to increase their conversion rates. This is the picture I got from Amazon, specifically on their lighting deal page.
As you can see, there is the timer to notifies their prospects if the offer is for a limited time only. The timer is live and keeps ticking in real time after the page fully loaded. So it uses the concepts of urgency, to make us buy it quickly before the offer ends. Then, there is a bar giving the percentage of prospects that claimed the products. If the bar goes higher, then the sense of scare is increasing, that makes us overvalue the product.
So these concepts are very applicable and very impactful. We probably have been one of the victims that are influenced by those concepts. My purpose of making this post is to make us become more aware of this tricky tactics, and think more rationally.
REFERENCES AND SUPPORTING ARTICLES
Lydia, C. C., Says, P. P., Says, S., Says, T., Says, K. M., & Scottlovingoodsays, S. L. (2015, July 27). The Scarcity Effect. Retrieved from https://www.neurosciencemarketing.com/blog/articles/scarcity-effect.htm#
Lynn, M. (1989, 06). Scarcity effects on desirability: Mediated by assumed expensiveness? Journal of Economic Psychology, 10(2), 257-274. doi:10.1016/0167-4870(89)90023-8
Not all emotions are created equal: The difference between positive and negative urgency. (n.d.). Retrieved from http://www.psychotherapybrownbag.com/psychotherapy_brown_bag_a/2009/05/not-all-emotions-are-created-equal-the-difference-between-positive-and-negative-urgency.html
Staff, I. (2016, January 15). Scarcity. Retrieved from https://www.investopedia.com/terms/s/scarcity.asp
Vacuum Sealer Machine, Ymiko Vacuum Sealer Portable Compact Vacuum Sealing System for Vacuum and Seal /Seal, Sous Vide Cooking Mufti-function including 20 Bags Black: Kitchen & Dining. (n.d.). Retrieved from https://www.amazon.com/Machine-Ymiko-Portable-Mufti-function-including/dp/B074FGJDSR/ref=gbps_img_s-3_0ee9_6e59bc9a?smid=AEWZIPYNLT4VT&pf_rd_p=30c09623-33cf-4469-be4c-3e8293ae0ee9&pf_rd_s=slot-3&pf_rd_t=701&pf_rd_i=gb_main&pf_rd_m=ATVPDKIKX0DER&pf_rd_r=NT1QHEJKWJA6PM5V1HRN
Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supply and demand on ratings of object value. Journal of Personality and Social Psychology, 32(5), 906-914. doi:10.1037/0022-35188.8.131.526