Less Means More

How brands leverage scarcity

Andrew Watts, Holly Murrell, Cai Jin

Few tour announcements in history have incited the same reaction as that of the Oasis reunion tour.

“The guns have fallen silent. The stars have aligned. The great wait is over. Come see. It will not be televised.”

With this statement, teary eyed fans across the world took their bomber jackets out of storage and dusted them off in anticipation.

And on Saturday 31^st August 2024, around 14 million fans joined online queues to buy tickets, making it the biggest concert launch ever seen in the UK and Ireland.

The huge demand resulted in mass hysteria, with fans waiting in online queues for hours in the hopes of getting tickets. Once through the queue, some fans were greeted with tickets that had more than doubled in cost, thanks to Ticketmaster’s dynamic pricing strategies. Though Ticketmaster’s pricing strategy has come under scrutiny since, this did not deter fans from purchasing tickets at these inflated prices.

But why?

This is a result of the "scarcity effect", a cognitive bias which causes consumers to place a higher value on something that is in short supply. The response to the Oasis reunion tour provides a lesson in how the scarcity effect can influence consumer behaviour, driving both demand and consumers’ willingness to pay.

How did Oasis create this scarcity?

This demand is not solely a result of their 16-year hiatus, though that certainly helps, Oasis’ announcement of the tour makes it clear that the performance will not be televised. Meaning that the only way for fans to experience the reunion, would be at one of the live shows, cultivating scarcity.

In addition, whilst extra dates have been added to the tour since, the notoriously volatile relationship between the two brothers begs question over how long this cease fire will last before the next split. Meaning this may really be the last tour Oasis fans get to experience.

This is but one example of how the scarcity effect can influence behaviour to increase purchase. The truth is it is a tactic that can be used by any brand, not just feuding rockstars.

By highlighting the scarcity of their products brands are able to increase their perceived value in the eyes of consumers. The effects of which can be furthered by cultivating an increased sense of urgency and inciting fear of missing out on their offering. As with something in short supply, there is a risk that once it is gone, it is gone for good. It is this FOMO which then prompts impulsive buying behaviour amongst consumers, not to mention, driving engagement and awareness for your brand.

At KHWS, we have work in partnership with Durham University Business School, making behavioural science accessible to brands with our Sales Trigger Insight Tool. This tool distils over 120 cognitive biases and heuristics, like the scarcity effect, into 9 key Sales Triggers, allowing brands to identify the unconscious nudges that drive purchase of their brand over competitors.

In fact, our Less Means More Sales Trigger encompasses the scarcity effect, identifying how brands can cultivate a sense of scarcity amongst consumers, thereby increasing the perceived value of their brand. The result? Increased engagement with your brand and a boost to your bottom line.

However, in 2004, H&M released their first capsule collection by partnering with Karl Lagerfeld, a renowned designer. The collaboration was highly publicised by fashion magazines, including Vogue, which drummed up anticipation ahead of release. Both Lagerfeld and H&M stated that the partnership sought to bring affordable, high-end fashion to everyone. However, the collection’s stock, which was intended to last for 2 weeks, sold out globally within the first day due to extraordinary demand.

Whilst intended as a way to make high-end fashion accessible to everyone, limited stock created scarcity and drove demand for the products.

Since the initial collection, there have been countless collaborations between H&M and other leading designers, including Balmain, Versace and Stella McCartney. To drum up anticipation, these launches are often accompanied by exclusive launch parties, where celebrities and supermodels debut the collection. Therefore, not only offering shoppers a chance to purchase high-end fashion at an affordable price but cultivating the exclusivity of the item.

And like clockwork, each collection sells out within hours of launch, with items hitting the resale market for over double the price.

Starbucks
Seasonal

Spring may be around the corner, but our mind is on the Pumpkin Spiced Latte (or PSL if you’re down with the kids). The quintessential Autumn drink was released by Starbucks in 2003, and since then has gained widespread popularity, a cult following and its very own Twitter account. Every Summer, memes heralding the return of PSL season resurface, building anticipation for the first sip of pumpkiny goodness.

The popularity of the pumpkin spice flavour is so strong, that it is now available seasonally in most large coffee chains. However, Starbucks still successfully trade on the fact that theirs is the original home of the PSL.

But why are they so popular? There are two key reasons.

The first – they are only available for 3 months.

This scarcity drives demand and nudges consumers to choose Starbucks over competitors for the chance to get their limited-edition drinks. Additionally, as Starbuck’s reward programme is points based, the more people buy, the more points they get. Therefore, after the season has passed, there is higher likelihood that consumers will continue to shop with Starbucks as they have accrued points.

The second – the smell.

The combination of spices provides a comforting, warming scent that we associate with Autumn. This association exists as the parts of our brain involved in processing smells are close to the those that process memory and emotion, making it easier to retrieve and store memories that are associated with smell. As a result, the scent of the spices used in the famous PSL can trigger happy, comforting memories. Not only does this effect further solidify the status of the PSL as the drink of Autumn, but it drives demand for the product and the need to consume it whilst it is available.

Despite the short period of time a Pumpkin Spice Latte, or indeed any other popular seasonal drink is on the menu, its effect in boosting engagement, loyalty and sales lasts well beyond their fleeting presence. Especially if brands succeed in triggering strong emotional connections between the scent and positive memories.

What’s more, if brands can achieve success with one popular seasonal drink, it increases the likelihood that consumers will try the next seasonal special – if they are a fan, the brand reaps the benefits until the next season, when the cycle begins again.

As one of the biggest and most available brands in the world, you are never too far from one of their products, making it hard to imagine them cultivating scarcity. However, in 2011 they successfully did so through their “Share a Coke” campaign. The campaign kicked off in Australia, where the brand faced challenges with engaging younger audiences and decided to move away from their traditional one size fits all marketing approach.

By putting 150 of Australia’s most popular names on products along with a “Share a coke with…” call to action, Coca Cola created personalised moments for mass consumed products.

This result of which increased consumption amongst younger consumers by 7% in Australia alone. Their Facebook traffic increased by 870% due to consumers taking selfies with products with their names on them. Although the most popular names in each country were placed on the bottles, the number of names was still high enough that it often made it difficult for consumers to find their own name. Thus, facilitating scarcity and increasing desire to find a product with your name on it.

The success of the Australian campaign was such that Coca Cola eventually launched it in 80 markets and have even come to be repeated in future campaigns such as 2024’s Diet Coke Break campaign. Where the brand looked to make taking time for yourself even more special and was coupled with weekly prize draws to further encourage engagement.

Now, we can’t really write a piece on the scarcity effect and leave out limited editions...

Limited edition products are, as the name suggests, limited in availability. Whether limited by the length of time for which they are released (like the Seasonal Pumpkin Spice Latte) or by the number of products released (H&M X Karl Lagerfeld) – they are not around forever, and therefore, evoke the scarcity effect.

There are thousands of examples of brands utilising limited editions to boost engagement and generate sales, so much so, that you will be hard pressed to not encounter a limited edition on a visit to your local supermarket. Whether it’s a limited-edition flavour of Walkers crisps, the annual reappearance of Cadbury’s Crème Eggs or the introduction of mystery Fanta flavours, there is no doubt that limited editions have grown in popularity over the years.

Image Source: Bestway

Image Source: Persuasion and Influence

Image Source: The Grocer

Not only do limited editions provide a way for brands to reap the benefits of the scarcity effect we discuss above, but they also offer a lower cost, lower risk way for brands to extend their range in comparison to full scale NPD launch – even if it is only temporarily.

As consumers are typically risk adverse, they gravitate towards brands and products they know. With limited-editions, consumers are generally familiar with the original product or brand, which is key to their success, as consumers can draw on previous experiences and form expectations based on quality, without increased cognitive effort. Thus, allowing brands to communicate with shoppers whilst on autopilot, piquing their interest while still providing a fluent shopping experience.

Furthermore, it is significantly easier to introduce a limited-edition product variant than to create a new product altogether. For example, with limited edition flavours, brands are not starting wholly from scratch, and will have some, if not most, of the infrastructure in place to produce the product, therefore reducing the manufacturing costs.

Some argue that the rise of limited edition brings with it a decline in innovation. In an increasingly competitive retail space, compounded by the cost-of-living crisis, it becomes harder for small, innovative challenger brands to cut through and get noticed when established brands use their position within the market to draw focus with the release of their next limited-edition product.

And what happens if brands miss the mark with their limited edition offering? Whilst lower than a full NPD launch, releasing limited editions still involves financial investment and there is still a risk that the product will not land as intended.

This may take form in a poorly received flavour, misalignment with your core brand, or even perhaps fatigue with too frequent release of limited-edition products. These factors can have a significant impact on the brand, creating financial pressures and negative publicity.

So how can brands win?

In the age of overconsumption, utilising the scarcity effect is a valuable tool to have in your arsenal, but like with anything else, it must be done in a way that fits with your brand. Miss the mark and it can be more damaging than beneficial.

At KHWS, our Sales Trigger Insight Tool identifies the most effective way for your brand to harness the scarcity effect through the Less Means More Trigger, meaning that you never miss the mark. Thus, allowing you to remove uncertainty prior to launch.