How to use scarcity techniques to increase online sales
Among the best ways to persuade customers to make the leap and buy. By tapping into their in-built fear of missing out, sales that might have been missed can be completed now.
Why does the threat of scarcity drive sales?
The needs of human beings have changed since our early ancestors. Their main focus was how to find food and feast when food is abundant in order to protect against times when it was scarce. Nowadays, the needs have expanded to include consumer goods. However, we have retained our ancestral fear of missing out. It is not only applied to food, it comes out whenever a possibility of losing something appears.
Scarcity techniques in the real and digital world
These techniques od scarcity can be used across a wide range of products. They are used by many stores for instance eBay, Amazon and Starbucks. As an example, Amazon displays how many are left of each product to potential buyers, putting pressure on shoppers to buy as the quantity reduces.
Categories of scarcity technique
Scarcity technique has different types that are suitable for different types of store. As an online retailer, customers will not be able to visualise a half-empty display stand, but they can accede to other elements that in-store shoppers do not.
- Seasonal special: a product that is only available for a seasonal period.
- Limited time offer: a price or a product available for a set period.
- Limited quantity sale: a limited number of items available for sale..
- Seasonal sales: a temporary reduction in prices for a seasonal period, either for seasonal products or a whole range
Scarcity technique risks and benefits
Scarcity techniques have multiple benefits but can also have risks. They can persuade a shopper to make purchase, but if there are some issues, they can reduce the trust in you as a retailer.
Different types of technique can have different risks and benefits.
- Limited time offer: in case where the product has an infinite quantity like eBooks, shoppers will often wait until the last minute to buy.
- Seasonal sales: can help to boost at a time when spending is traditionally lower as well as clearing out old products in time for a new range
- Seasonal special: can become a yearly event — customers will specifically visit to buy this product at these times of year. Customers will, however, be upset if these products are not available when expected.
- Limited quantity sale: creates an impression of desirable rarity, but if the software isn’t working smoothly, can create frustration among buyers.
One of the main risks with scarcity techniques is over-use of discounting. If your customers are aware that you frequently give discounts, they will often stop buying until these sales, reducing your normal-price sales. Another risk is having issues with technology. If your software doesn’t accurately track the quantity of items left, shoppers often feel cheated.
Making sure that your strategy matches your products and that your software is up to scratch, and scarcity techniques will have a dramatic positive effect on your sales.
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— Square Canada (@SquareCanada) 16 de junio de 2017