Marketers Use This Trick to Get Your Money. Here’s How to Outsmart Them
When Kylie Jenner introduces new shades and products into her Kylie Cosmetics lines, the internet goes nuts.
Miss Jenner herself previews swatches on her Snapchat and Instagram stories, and the hype builds as fast as she can hit “post,” which sometimes seems like every hour of the day.
The result of that hype?
Newly launched lip kits are known to sell out insanely fast. Think I’m exaggerating? In 2016, the cosmetic brand’s Valentine’s Day collection sold out in 10 minutes.
Jenner’s products mix exclusivity with limited quantities, making the Kylie Cosmetics products more like status symbol than makeup.
Those who can’t get their hands on items are often left disappointed. Some seek the products elsewhere, often from unauthorized retailers — and end up unknowingly buying fake, dangerous versions of the lip kits.
But are these limited quantities that fuel our obsession for real?
How Scarcity Marketing Messes With Our Brains
Have you ever felt pressured to buy something because you were worried about it not being available tomorrow? Or did you buy simply because the ticking clock next to the product made you nervous?
If so, you may have fallen for the fear-inducing tactics of scarcity marketing. This sales tactic uses the principle of supply and demand to drive people to buy now.
I’m not here to bore you with linear models of supply and demand, I promise. Plus, I’m sure you’re already aware of the relationship between the two: As demand increases and supply decreases, prices go up — and vice versa.
Marketers use the supply and demand principle to mess with your head.
Danny Watkinson, digital marketing consultant at dijitul, wrote in an email that common indicators of scarcity marketing include numbers near call-to-action buttons that say things like “Book Now” or “Buy Now.” Often, websites will say there are only a certain number of rooms left at a given price, which pressures you to book immediately.
Robert Cialdini, Ph.D., explains in his book, “Influence: The Psychology of Persuasion”, that scarcity is one of six universal principles that make our brains say “yes” to a deal. Opportunities seem more valuable when they have limited availability. This means you’ll see a product with limited availability as more valuable, even if it truly isn’t — and you’ll feel enticed to buy it before it’s too late.
When human beings face a potential loss, they are more motivated to act than they are by the thought of gaining something of equal value, writes Cialdini.
In millennial terms, good ol’ FOMO (fear of missing out) is what drives you to make those purchases. You don’t want to get left behind while all of your peers enjoy the hottest, newest product, so you take the plunge and buy it.
For example, when Snapchat Spectacles launched in 2016, they were only available at pop-up shops or in a small number of vending machines across the country, making them incredibly difficult to obtain. The hype was huge. People were willing to take a trip to the Grand Canyon just to get their hands on a pair.
Can the Scarcity Bubble Burst?
Scarcity marketing can turn even the most meaningless items into hot commodities by playing on a false perception that one day they will be worth thousands of dollars.
This junk-turned-treasure phenomenon can be summed up in two words: Beanie Babies.
If you were alive during the ‘90s, you may remember the craze over the small stuffed animals. Their creator, Ty Warner, was a master of manipulation when it came to supply and demand. He only released a limited number of each Beanie Baby, and would only sell them in limited quantities to independent retailers, instead of big-name chain stores. Soon after one was released, he would retire it –– and release a new one in its place.
As a result, people began to buy the Beanie Babies like crazy. Upon release, consumers would rush to markets and snatch up the new edition in fear of missing out. Perceived values of the toys skyrocketed; according to Slate writer Mark Joseph Stern, some believed they would eventually be worth thousands of dollars.
But didn’t people know they were just… toys?
Not so much.
Stern writes that for a multitude of reasons, people really did believe that they were going to get rich off of kids’ toys. The thrill of the chase made some people crazed enough to spend huge amounts on the small, plush toys.
Around January 1999, as reported by the New York Post, Warner announced that his company, Ty Inc., would no longer produce new Beanie Babies. Consumers lost interest, and as a result, retailers struggled to sell their remaining supplies. There was suddenly a surplus, meaning Beanie Babies were no longer as valuable as everyone thought they were.
As a result, Beanie Babies became nearly worthless. Today, they sell for as little as $2.95 on eBay.
How to Avoid Falling for Scarcity Marketing
If you have a hard time resisting blowout sales or limited-edition releases, know that it is possible to beat that urge to give in.
As with any impulse purchase, one of the best things to do is take a step back.
Psychology Today calls this the SOS technique: Step back, reorient yourself with your values and beliefs, and do a self-check. Doing so, you take your focus off the imminent purchase and remind yourself of what’s most important: Are you buying that product because you want it or because you need it?
Watkinson also recommends putting the purchase’s availability into perspective.
“If the product is something extremely popular and being sold by a well known brand, then the likelihood that they’re going to stop selling them forever once they sell all of their current stock is very low, and you’ll likely be able to purchase [it] again very soon,” he wrote.
As for Kylie Jenner’s lip kits… let’s just say there are products out there just as great for under $10 — and they don’t sell out in 10 minutes!
Kelly Anne Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.