Creating a sense of scarcity and urgency is a surefire way to increasing sales. By limiting a product’s quantity or setting a deadline for a perceived deal, you’re targeting a major consumer fear: missing out on a hot bargain.
Studies through the years have continuously shown that scarcity plays a major role in not only what a consumer buys, but when they buy it. The power of this psychological strategy can be seen worldwide, and as a consumer, you’ve doubtless found yourself lured by the words “limited time” and “while supplies last” at some time or another.
In 1975 researchers conducted an experiment that tested the influence of perceived scarcity. In the study, subjects were asked to rate identical chocolate chip cookies found in two jars: a 10-cookie jar and a 2-cookie jar. Despite the cookies being exactly the same, the two-cookie jar continuously received higher ratings. Furthermore, if a jar contained a lot of cookies only to have its quantity mysteriously reduced, the remaining cookies received an ever higher rating than the jar’s cookies whose quantity didn’t change.
This amazing effect is seen everyday, everywhere as businesses of every industry utilize clever marketing techniques that target human psychology. So what can you do to create a sense of urgency and scarcity in your own store? Check out these easy fool-proof tactics that you can start implementing today:
Create Limited Time Promotions:
It’s a tactic we’re all familiar with. “This offer ends at midnight!” and “Order within the next 12 hours and receive…” After all, who doesn’t love a good, limited-time discount? As a consumer, you’re getting a bargain; as a merchant, your sales are hopefully spiking.
By inducing a state of urgency, you’re ensuring shoppers take immediate action rather than spending time thinking their decision over. Without an immediate call to action, you’ll find shoppers will spend their time procrastinating over their purchase – providing them with the time to rethink their hasty purchasing decision.
Remember, you want your customers to enjoy your products right now, not later! Incite your customers to buy with promotions that expire after a set duration. This may be advertised with a time limit that expires in a certain number of hours, at a certain time, or on a certain date. Whatever you decide, use words that push customers to make a decision sooner rather than later.
Show Low Stock Value:
Stock shortages can represent a nightmare to merchants, but with some smart marketing, can greatly benefit your business. By making your shoppers aware of a stock shortage, you’re advertising a product’s scarcity and increasing its perceived value. Think of your past shopping experiences: who hasn’t fallen victim to a marketing scheme that shows the dwindling stock of a hot, rapidly selling product? Nobody wants to miss out on a fast-selling product that countless others have already taken advantage of.
To implement this tactic, ensure your products show the remaining stock on the product page, i.e. “Hurry, only 3 in stock” or “Act now, only 5 in stock!” You can optionally showcase this product in an email, banner, or other advertisement. No matter what marketing channel you decide on, ensure your call to action incites customers to purchase said product before its fast-selling stock hits zero.
Create Limited Quantity Products:
Limited quantity stock is an age-old tactic that has seen continuous success throughout the years. By creating a product with a set, limited stock, customers are urged to take immediate action in order to reserve their scarce, once-in-a-lifetime product.
While this strategy won’t work for every business, it’s ideal for any business that sells limited edition or limited time products. Advertise the scarcity of your product by showcasing “limited edition” or similar verbiage on your product pages, i.e. “1 unit left of 100 limited edition units.” You’ll be surprised by how many shoppers make a purchase simply due to the fact that come tomorrow, said product won’t ever be available for purchase again.
Offer Limited Time Free Shipping:
High shipping and handling cost is the leading cause for cart abandonment. By offering limited time free shipping, customers are urged to make their purchase now rather than later.
While this sense of urgency may not seem as appealing as a limited-time promotion, studies show that consumers are more likely to respond to free shipping than a product discount. A study by the Wharton Report indicates that “a free shipping offer that saves a customer $6.99 is more appealing to many than a discount that cuts the purchase price by $10.”
If your store offers year-round free shipping, optionally offer free two-day shipping or some other form of free expedited shipping instead.
Use Language that Incites Urgency:
Word choice plays a critical role in the effectiveness of your calls to action. Whether it’s a banner, newsletter or some other form of advertisement, well thought-out, carefully worded copy is essential to successfully invoking urgency and scarcity.
Telling customers to “buy now” doesn’t have the same effect as “Hurry, supplies are running out fast!” It may take some testing to determine what works best for your store, so you’ll want to pay attention to sales and marketing reports that show the effectiveness of your advertisements.
The way you describe your call to action is how customers will perceive your discount/sale. Critically examine your copy to determine if it accomplishes its purpose: to have customers buy now, not later.
Whatever tactic you decide to implement, always ensure you’re using urgency and scarcity responsibly. Customers who feel they’ve been duped into a purchase aren’t likely to remain repeat, loyal customers. False deals may lead to an increase of refund requests and a poor business reputation. Remember, your goal here is to push customers to buy now, but you don’t want a bunch of shoppers with buyer’s remorse on your hands due to blatant trickery.