With Black Friday here and gone I am left with the very simple question the I would think is in the minds of many brand managers, “Do we promote sales over scarcity, and how does that impact the perception of our brand?”
Clearly on Black Friday there is a scarcity of products. People are out to get the great deals, though I didn’t think they were all that fantastic. There is only a certain amount of every product in the store, or at least only a certain amount at that price. The issue is how this impacts a brand. If there are limited quantities, people are more apt to think that the item is better. If there are limited quantities and some are already gone – or in the process of being taken – a consumer is ever more likely to want to buy the product. Scarcity, or the perceived scarcity, creates a demand for the product.
Even Lands’ End, the company I work for, has employed this concept in our “On The Counter” area of our website. There are limited quantities of the items put up each week and then discounted throughout the week even more. But, when an item is out it is still displayed with a “Sold Out” where the price should be. It shows that the other items may sell out as well, so get yours now.
This tactic is a great way to drive sales at all levels, but it does limit sales. If you are sold out of an item, clearly you cannot sell more of it. If you create scarcity around a product then you are, by the very nature of scarcity, limiting sales. It is important to think about that when using a strategy that promotes scarcity over sales. On the other hand, if you always have something then there is no urgency for the customer to purchase that moment; that is sales over scarcity.
Think about how your brand is positioned and ask yourself, “Which is the better fit, sales or scarcity?” The answer may change depending on the time of year, but every time it is changed you are impacting how people view your brand.
What do you think is better, sales or scarcity? Let us know in the comments.
This has been a Thought From The Cake Scraps.