Why Do Popular Products Sell Faster?
Imagine walking into a restaurant as a first time customer. After weeks listening to your coworker rave about the delicious food, you’re in the area and you've decided to give it a shot.
One problem. You’re racking your brain, but you can’t remember what items she said to try. You’re now staring at a menu with way too many options, and you’re not craving anything in particular, so you’re at a total loss of what to order. As you get closer to the front of the line, you’re starting to stress out, because you still haven’t selected what you’re going to have for lunch.
A-ha! There on the menu: Customer Favorites. Of those three options, you pick the large Greek salad, and happily order it at the counter. If everyone else orders it, it must be good, right?
In a previous article, we explored how scarcity in marketing can supercharge sales and inspire action. In this article, we are going to look more deeply into how positioning your product as “popular” or “best-selling” can hook your customers and make it easier for them to purchase.
When an item is perceived as scarce because of high demand versus other circumstances (such as limited availability or limited time) the perceived product value is even stronger. This provides several benefits, such as:
The urgency to take action immediately
Enticing customers to buy the product to feel included/ identify with a group
The ability to use certain tools to effectively drive sales by communicating the scarcity and high demand of your product
We’ll take a look at how this principle works, and then unpack ways you can use these tactics in your business.
How Popularity Differs From Other Forms of Scarcity
In the world of marketing, harnessing the power of scarcity can be a game-changer, especially when it comes to showcasing your product's popularity. Supply-related scarcity, with its limited supply and limited edition allure, may seem similar to demand-related scarcity, but it holds some crucial distinctions. The former often cultivates a sense of exclusivity, making consumers feel like part of an elite group. On the other hand, demand-related scarcity communicates more than just rarity; it implies fierce competition, social acceptance, and inherent product value.
Imagine this scenario: You come across a product, and you learn that it's scarce. Naturally, you assume it's because other consumers have recognized its quality and snapped it up in large quantities. This understanding further reinforces the notion that the product must be truly excellent, prompting a stronger desire to possess it. In a way, owning such an item feels like winning a competition, providing a sense of accomplishment and satisfaction.
Moreover, our previous encounters with demand-related scarcity play a vital role in shaping our purchasing behavior. Positive experiences with products that were once in high demand and eventually acquired create a positive association, making us more inclined to repeat the process with new offerings.
So, as a marketer, effectively communicating your product's popularity through scarcity can tap into customers' innate desire to own something exceptional and socially validated. By understanding the subtle differences between supply and demand-related scarcity, you can strategically wield this powerful tool to boost your brand's allure and drive sales.
Creating Urgency in Consumers
In today's world of marketing, demand scarcity has become an incredibly effective tactic in creating a sense of urgency among customers to buy a product. If you've spent even a minute on social media, you've likely come across subtle marketing messages emphasizing product popularity, such as "back in stock" or "only a few tickets left." These statements not only indicate high demand but trigger the Fear of Missing Out (FOMO) sensation that drives us not to miss out on what everyone else is doing or buying.
Major retailers like Nordstrom and home shopping networks like QVC have mastered the art of leveraging demand scarcity to maintain their position in the market. Nordstrom's promotion of two new Nike Air shoe styles on social media generated a frenzy of comments, with customers expressing concern over product availability. When the shoe sold out online, the possibility of a restock was ruled out, leaving one shopper feeling like he had missed out on a popular item.
The success of these scarcity tactics lies in the creation of a social experience for consumers, driving them to make decisions on the spot. Incorporating scarcity into marketing strategies helps foster a genuine sense of urgency and pushes customers to act swiftly before they miss out on a coveted product.
In QVC's case, scarcity can be observed not only in the on-air presentations but also on their website, where trending products and waitlists are utilized to maintain consumer interest. Retailers like HSN and QVC accurately create demand-related scarcity by ordering limited quantities of products in advance, which assures customers that the claims of limited availability are truthful and informative.
Satisfying the Need to Fit In
The power of demand-driven scarcity goes beyond creating a sense of exclusivity; it taps into our inherent need for conformity and belonging. As social beings, we naturally seek to be part of a group, whether it's a large community or a niche with shared interests. This need for conformity influences our thoughts, beliefs, behaviors, and, importantly, our purchase decisions.
When a product becomes scarce due to high demand, it triggers a desire among consumers to feel included and identify with those who already possess the item. The bandwagon effect comes into play, where we are drawn to popular products because we associate their popularity with higher quality and social acceptance. This effect is particularly noticeable in industries like the restaurant sector, where displaying the number of plates sold for certain dishes on the menu can significantly increase sales.
The need for conformity and the bandwagon effect are intertwined with peer pressure, which can impact how we view products and make choices. In various social settings, we may be influenced by the actions of our peers, such as leaving higher tips at restaurants when our dining companions do the same.
The magic of demand scarcity lies in how it creates a sense of urgency, compelling us to act quickly and secure a coveted product before it runs out. In a fascinating study conducted in Beijing, a restaurant chain increased sales for specific menu items by simply displaying the number of plates sold in the previous week. This manipulation influenced diners' choices through saliency and observational learning, ultimately encouraging conformity to what others were selecting.
Whether it's a sneakerhead collecting coveted sneakers or diners choosing popular dishes, demand-driven scarcity fuels our desire to be part of the herd. The knowledge that others value and desire a scarce product increases its perceived worth, drawing us to own it as well.
5 Ways You Can Communicate that Your Product is in High Demand
Sales Restrictions
Leveraging sales restrictions can be a powerful way to ignite high demand and boost sales, especially when it comes to the category of demand scarcity. Picture yourself strolling through the grocery store, spotting a fantastic deal on your favorite cereal. Excitedly, you decide to grab a box, only to be greeted by a sign that reads, "Limit of 3 per customer." Immediately, your mind starts racing. This promotion must be a hit, and the product is flying off the shelves! Fearing you might miss out, you quickly make the wise decision to seize the opportunity and grab the maximum allowance of three boxes instead of just one.
This tactic has proven to be incredibly effective, and retailers keep using it time and time again for a good reason. Sales figures for a major grocery chain in the United States were analyzed over an extensive 80-week period. The results were astounding—products with sales restrictions like these sold significantly more units than those without. The limitation creates a sense of urgency, prompting customers to act swiftly and make multiple purchases to avoid the risk of missing out on a hot deal.
Bestsellers
Bestsellers hold immense power in influencing our purchase decisions by signaling popularity and high demand across various categories, from books to cosmetics to music. When faced with uncertainty about what to buy, we often find ourselves naturally drawn to the items labeled as bestsellers. This distinction enables us to make decisions more effortlessly, guided by the notion that if so many others have chosen it, it must be worth our consideration.
The magic behind bestsellers lies in the psychology of social proof. When a product or service is designated as "most popular" or "bestselling," it conveys a powerful message: countless others have chosen it, and it must be exceptional. As consumers, this triggers a sense of Fear of Missing Out (FOMO), compelling us not to be left out of a product that others have validated with their purchases.
From a business perspective, highlighting your most popular or bestselling products and services is a strategic move. It evokes FOMO and instills confidence in potential buyers, assuring them that the item in high demand is of excellent quality and worth their investment. By bestowing the "bestselling" or "most popular" label, you provide customers with a special stamp of approval, further fueling their desire to own the acclaimed product or experience the coveted service.
Back in Stock
Try labeling a returning product as “now back in stock”. This wording implies that it is popular enough to have sold out before. This is an easy and effective strategy because it simply requires that you inform your customers that the product is now available for sale again. This could look like labeling your product on your website, or even mentioning the product in marketing emails, letting your loyal customers be the first ones to know it’s back in stock.
Number of Items Left
Even if a product is not inherently scarce, displaying low inventory levels, such as "only three left," can generate the same effect as genuine scarcity. The inclusion of the remaining units can genuinely promote higher sales, provided the statement remains accurate and true.
Beyond the realm of retail, demand-related scarcity has proven successful for service-oriented businesses as well. A simple statement on their websites, showcasing the number of clients served or prominent companies availing their services, sparks a perception of popularity and prestige. Salespeople who skillfully mention phrases like "We are only taking on two more clients" artfully activate demand-related scarcity and evoke a fear of missing out.
An additional approach in high-demand scarcity involves showcasing the number of items sold. Whether it's revealing how many hotel rooms were booked that day or the total units of a product already sold, this strategy effectively communicates popularity and fosters a desire among customers not to miss out on a much-sought-after item or experience.
Wait List
A waitlist serves as a powerful tool, not only signaling high demand for a product or service but also presenting an exclusive opportunity for those on the list to eventually get their hands on the coveted item—they just need to exercise a bit of patience. This technique isn't unique to retail; various industries, including car manufacturers, golf club makers, private schools, apartment complexes, and other non-retail organizations, have successfully utilized waitlists to communicate popularity and high demand.
If multiple companies and industries can effectively leverage waitlists to signal high demand, why not adopt this approach before launching your own products or services? By informing customers of the possibility of products running out based on demand or guaranteeing early access to those on the waitlist, you can effectively create a buzz around your offerings and ignite anticipation among potential buyers. The allure of being part of an exclusive group that gains access to the hot product or service will further motivate customers to join the waitlist, boosting excitement and demand even before the official launch.
Conclusion
In conclusion, understanding and effectively communicating the popularity and high demand of your product can be a game-changer in driving sales. By tapping into customers' innate desire to be part of something exceptional and socially validated, demand-related scarcity creates a sense of urgency and motivates them to make swift purchasing decisions. Leveraging tactics such as sales restrictions, highlighting bestsellers, and showcasing the number of items left or waitlists can further enhance the perception of scarcity and exclusivity. These strategies not only satisfy our need for conformity and belonging but also trigger the Fear of Missing Out (FOMO), compelling customers to act quickly to secure a coveted product. By incorporating these powerful scarcity techniques into your marketing strategies, you can boost your brand's allure, captivate your audience, and ultimately drive sales to new heights.
To read more about how you can use scarcity to drive up sales in your business, click here to get your copy of The Power of Scarcity.