Weekly Column: 2017-10-06
There is a word called “scarcity.” It means that because the quantity of something is rare, its value is more appreciated, but to put it more simply, it means that there is a lot of demand with an insufficient supply. Two components are necessary for scarcity to be established: first, the value of a product or service must be high, and second, there must be a high demand for this product or service. Also, if the quantity of the product or service decreases, but the demand continues to rise, that is scarcity. It is akin to no matter how beautiful a pebble is, it cannot compare to the value of a diamond.
Many enterprises utilize this concept in their businesses. They create a special event in which only a small amount of the product is produced and sold in a limited period of time. Even though it may be something that consumers do not necessarily need, it creates the feeling that they will regret it if they miss out on this opportunity, leading them to make impulsive purchases. This means that you can move consumers through the value of scarcity.
A few years ago, we came out with men’s winter jackets in three colors: black, blue, and red. Because they were menswear, selling the black and blue jackets were no problem at all, but as expected, the red jackets were difficult to sell. If we sold 10 jackets of the different colors sold, but only one red would sell, we thought it would be the right decision to lower the price of the red jackets and sell them quickly before Christmas. It was clear that after Christmas, they would just remain in stock, but if we missed this important period, we would suffer an even great loss.
However, we decided to try using this to our advantage. First, we raised the price a bit and advertised them as “Limited Edition.” Then, we advertised that it was a limited sale only until Christmas. What happened next was amazing. The red jackets which were not selling at all began to be the most sold as Christmas approached. While it is generally difficult to sell this product that is the uncommon color of red at a more expensive price, consumers perceived the product to be scarce and maximized their desire to possess it. This stimulated their desire to make the purchase.
In truth, the reason people are so obsessed with limited edition sales is simple. The thing that these people who buy scarce products have in common is that they have a certain degree of exhibitionism. If they possess something that others don’t have, it is not that the quality or usefulness of it will equal the price, but rather people do not hesitate to buy luxury goods and expensive products because they want to show themselves off through their purchased products. By thinking inversely, it is quite simple to raise the value of a product that isn’t selling by increasing its price and sell more of the product. You should remember, however, that if the quality of the limited edition products is not good, it can lead to adverse effects.
In conclusion, it is very important to stimulate the consumer’s desire to possess something in order to sell products. If you are able to do this well, it will also help to strengthen your brand competitiveness. While it is important to profit through limited edition sales, it is useful in drawing the attention of consumers who are not interested in that particular product. However, if you focus too much on being profitable through limited edition sales, the scarcity appeal may decrease, so special attention is required in this area. This is because indiscriminate limited edition sales will eventually diminish the value of the limited edition product.
If you sell products through the appropriate scarce value marketing strategy, you can raise not only your profits but your brand value as well and stimulate consumer curiosity. However, you must not forget that rather than using limited edition sales to maximize sales, you must first understand your customers and make it a priority to do marketing that is for them.