How to Use Product Scarcity

Imagine you are at a food market looking for a loaf of homemade bread.

You approach 2 stalls: at the first, there is a flurry of customers, just 2 loaves left and a sign that reads ‘freshly baked bread, selling fast’. The second stall has 20 loaves on display, has no queue and no sign.

Which stall seems more attractive to you? If your answer is the first stall, and you’ve heard the term ‘FOMO’ (fear or missing out), you’re not alone. You’re the kind of consumer that businesses are targeting with scarcity tactics in order to increase sales.

What is the scarcity principle?

One of the biggest problems that e-commerce merchants are confronted with is website browsers. These are potential customers who spend time looking at products on a website, but don’t actually complete a transaction. Instead, they exit the site, perhaps thinking they will later return to complete their purchase.

According to MarketingSherpa, only 30% of traffic is owing to these return visits. Now, business owners are doing everything they can to try and grab customers while they’re actively on their website, and they’re using scarcity tactics to do so.

Scarcity or urgency tactics have become increasingly popular in the e-commerce industry, in an an effort to increase conversion rates and speed up the customer buying process. Scarcity tactics have a huge impact on consumers who may otherwise exit a website. It is the marriage of: a) sense of urgency and b) the fear that a desired product may run out, that leads to customer purchases. For more information on increasing sales through psychology and emotional targeting, click here. The basic concept of supply and demand entails that a product that is rare, limited edition or one of a kind is worth more. Communicating to your audience, that your business’ stock is in high demand, conveying a shortage, or a promotion that has a time restraint can help to maximise conversion rates.

There are a number of useful tactics that business owners are using to create scarcity.

5 useful scarcity tactics:

1. Limited time sales and offers

Launching a promotion, sale or offer on your website for a limited time is a useful method when trying to increase sales. Customers will feel a sense of urgency and the need to respond quickly due to the short time frame of the promotion.

2. Flash sales

Flash sales also run for a limited time, but only include a select number of products. This scarcity tactic has become a particularly popular way to boost conversion rates. Ensure that you are effectively communicating your flash sale on all social media platforms and via e-mail/newsletter. Upon hearing that your promotion is only running for a limited time, customers will feel the need to visit your website immediately and complete their purchase ASAP. It is becoming more and more common for e-commerce websites to display real-time countdowns in their header or on individual product pages. These live countdowns are a pulsating reminder of the decreasing time that customers can benefit from your promotion. For more information on using promo codes on your website click here.

3. Displaying stock quantity

Displaying stock levels is a tactic that has had a resounding effect on customers, who respond more quickly when they feel that there is a shortage of a specific product that they are interested in. By communicating your stock level: ‘just 5 left!’, ‘only 3 to go!’ - customers know to act more quickly because of a fear of missing out on a specific item. Using the shortage of stock technique can be a powerful way to create scarcity. Product shortages have the ability to increase the perceived worth of your products for your customers. It all comes back to supply and demand: if there is less of something, it can feel worth more to the consumer.

4. Shipping offers

When it comes to online shopping, customers feel a great sense of reassurance and less risk when shipping costs are reduced, or free. Shipping offers have had a dramatic effect on conversion rates. This is due to the fact that customers feel they have nothing to lose and may as well complete a transaction. Remember: with online shopping you are asking the consumer to part with their money, without having ever physically tried or interacted with that product before.



Generous shipping offers can have an extremely positive impact on your conversion rates, but these may be balanced by your return rates sky rising also. For more information on reducing your return rates, take a look here. Many ecommerce businesses offer next day or even free delivery if a customer orders before a certain time. As your aim is to avert potential customers from exiting your site altogether (and running the risk that they may not return), shipping offers can be the small token that closes the deal, converting a potential customer to a paying customer.

5. Limited edition products

Ensure that you are communicating any limited edition products to customers. If your business is selling a product of which there is only a certain amount manufactured… let your customers know!

Don’t forget your copy

The copy on your website is hugely important when it comes to creating scarcity: ‘get them before they’re gone’, ‘selling fast!’, ‘last chance to buy!’. Honestly conveying to customers that supply is limited has a strong effect on customers’ mentalities and their commitment to purchase. Supplement the copy on your website with email marketing and engaging social media content.

Beware of Fake Scarcity

Ensure that scarcity on your site is sincere, not fake. Your countdown timers or stock levels need to be truthful to avoid tricking or misleading your customers. As a responsible merchant, your intention is to convert browsers and potential customers to fulfil purchases, as opposed to exiting your website. Don’t overuse scarcity tactics. Never make claims that something is “limited edition” when it isn’t, or lure customers into buying something they don’t want. In these instances, you won’t gain customers’ loyalty. Consider the 5 useful urgency tactics and test one to see how it affects your conversion rates.

Hurry, while stocks last!

Want to know more about how to grow your Shopify Store and market your products? Elkfox are here to help. We’ve got all the knowledge when it comes to developing your e-commerce store and. Get in touch to find out more about our services and optimising your website.

* Image via Finery