Scarcity is a hell of a drug
By: Jared Rosen
Tags: Automotive, Marketing, Branding

Scarcity is a hell of a drug — the moment I got my Nomar Garciapara rookie Red Sox baseball card I knew it was something special. It was one of the things you brought with you for no reason or told your friends about — never fully letting go of when they wanted to steal a peek.

If personalization is when you surgically tailor a brand experience or message to an audience, then scarcity is in a way the antithesis. A brand built on scarcity organizes your audience neatly based on a fandom continuum delineating diehards and casual perusers.

Scarcity is the ultimate swiss army knife capable of being deployed in a variety of ways to achieve many objectives from increasing perceived value to instilling fan-FOMO. In past decades, scarcity has been a strategy reserved for premium import brands or a way to filter access to premier experiences.

Today, calculated scarcity is poised to be a tool that will put a premium on originality and give power to creators all while introducing market dynamics.

SCARCITY MAKES GOOD COMPANIES BLINK

Scarcity is an ever-narrowing tightrope… will you wade out into the open and take oncoming unfettered criticism? Does retreating adversely affect the original intended outcome?

The Ford Bronco virtual reservation program grossed 165k+ deposits as of September 2020 (MotorTrend). In order to capitalize off the long-awaited return of the icon 3,500 First Editions were minted at a $10,000 premium over the next highest trim. After the special edition sold out in a matter of days Ford doubled First Edition production to 7,000… diluting the original scarcity.

When toying with scarcity balancing enthusiast fandom with easy profit seems like a simple calculation, however, it’s cockiness that will short-circuit mounting prestige. Calculating the value of scarcity is more like a function of lifetime customer value multiplied by fandom intensity; rather than a rolling tally of quarterly profit.

SCARCITY BREEDS CULTURAL UBIQUITY

To the chagrin of many, the Pumpkin Spice Latte (PSL) has rightfully earned its place as a seasonal symbol. At 52g of carbs this hefty gulp of autumn has leaned into seasonal scarcity as a moat to keep this profit puppy concentrated to only a few months. Scarcity when executed well can be the best insurance policy in hard times. Pandemic Starbucks foot traffic took a 25% nosedive… until the annual PSL frenzy took hold lifting store traffic to only a smidge (6–7%) below 2019 (Thinknum).

Forbes in 2013 waxed poetic about the gravity defying sugar saturated treat, “products that are available only for a limited time have a kind of built-in marketing that can grow in impact over time.”

In 2020, social chatter ballooned 10x for Starbucks as PSL opening weekend erupted. Scarcity seems counterfactual when a product hits peak cultural ubiquity, however, strictly constraining its availability carbonates demand during the fall.

Scarcity is also a flywheel; PSL’s salience has spawned over 1.5m Instagram posts since its inception, spurred countless rival products and spawned scathing memes all padding Starbucks coffers with a cool $100m. Since scarcity evangelizes audiences it’s no surprise that PSL regulars spend on average $1.14 more than their non-festive counterparts.

SCARCITY VALUES HURDLES

Friction is the enemy of digital attribution, that’s why trimming loading times, slimming copy, optimizing button colors are marketing strategies that can inch up conversion rates. However, it’s buzzworthy scarcity that actually ignites greater fandom even with higher consumer hurdles.

“The process has evolved beyond the act of buying shoes, a feat of competitiveness that’s fueled by adrenaline. These people aren’t purchasing shoes so much as hunting them” (Mashable)

Both ‘adrenaline’ and ‘competitiveness’ are two characteristics often omitted when consumers describe an ideal frictionless shopping experience. But hurdles in many cases elevate the creator and fuel residual fandom.

Secondhand scarcity has taken off during the pandemic with sites like StockX and TheRealReal providing a more affordable way for fans to own luxury and a way to flaunt fan creds. Digital drop experiences pioneered by Adidas and Nike are purposefully stressful but reward fans willing to wait to win the privilege of buying new kicks. Hurdles give brands the ability to collect more first-party data and curate an impassioned following.

SCARCITY DEMOCRATIZES FANDOM

Until recently only tangible earthly-goods could in fact be scarce — signed Guy Fieri cookbooks, Derek Jeter baseballs, 1964 Ford Mustangs, Yeezy Boost 350s are all available in finite quantities. Digital ‘goods’ like an mp3 of Smash Mouth’s All-Star could conceivably be replicated an infinite amount of times.

Today, digital scarcity is finally possible with cryptocurrency technology. Since the blockchain provides a verified record of transactions it has opened the door for fans to be singular owners of a digital asset. The NBA has partnered with Dapper Labs to develop in-game collectibles for game highlights. Imagine owning that pull-up jumper by LeBron in the conference finals and only YOU have the rights… definitely a long way from last generations’ baseball card collections.

As digital assets and trading marketplaces grow in popularity it’s fandom that will be democratized as more individuals will have access to the unique IP. For scarcity to succeed brands must invest in tools to invigorate passionate audiences rather than feigning relevance through advertising.

Scarcity is the ultimate checkmate for brands hungry to kickstart their marketing flywheel and make key IP and branding work harder.