The Psychology of Scarcity: How luxury brands use scarcity to generate interest.

Luxury brands have perfected the art of making the unattainable seem irresistible. Leveraging human psychology to fuel desire and cultivate interest.

It’s not about denying buyers what they want; it's about framing access as a privilege.

Let’s take Rolex for example.

Rolex is arguably the most iconic and recognisable watch brand on the planet. This iconicity is due, in part, to the masterful manipulation of scarcity.

You’d think those who are ready to drop tens of thousands of pounds on a watch would be able to simply walk in and purchase any watch that they desired…”good luck to any business that’s ready to turn down that sort of money” you might think.

But you’d be wrong to think this. In fact, it doesn’t really matter how much money you wave about at a Rolex store, all you’re able to do is walk around, peruse their selection of beautiful timepieces, and ask to be put on a waiting list.

Now, it can take between 6 -24 months to hear back from them, and when they finally reach out to tell you that they have your watch ready, you’ve got a 3 day window to buy.

And if you don’t buy within the 3 day window, they’ll simply give your watch to the next person on the list.

Needless to say, everyone buys the Rolex immediately, because they know that it could be another 24 months before they could get their hands on one again.

At its core, it seems counterintuitive for any business to limit their ability to sell to people that so fervently want to buy their products…but this approach has cultivated a huge level of status and power that has allowed Rolex to build tremendous brand equity.

It’s no wonder that this approach has been adopted by so many brands within the luxury sector…but it’s not only the luxury sector that benefits from the manipulation of scarcity.

Look at Glastonbury festival:

Unlike other festivals that go for a tiered ticket release system to generate interest…you have to register.

There are only about 150,000 tickets available, but there will often be close to a million people registering their interest.

So how do Glastonbury capitalise on this?

Firstly they will send you constant notifications, letting you know how many people have signed up (the people you’ve got to compete with for tickets).

Next, they tease the lineup in small batches, releasing just a handful of artists at a time to generate excitement.

And finally, when they do release the tickets, they will only be available to book at 5AM, meaning that it’s only the superfans and hardcore festival go-ers that end up with tickets.

This approach does two things:

It increases the relative “perceived value” of a commodity.

And

It naturally creates a group of “Brand Advocates”

A “Brand Advocate” is the customer that camps outside of the shop overnight to get their favourite trainers, or spends countless hours researching the details and engrossing themselves with the brand story.

The primary benefit of the evangelical brand advocate is that they do most of the marketing work for you, simply by virtue of the fact that they spend half their time walking around telling their friends, family, and virtually anyone they meet just how fantastic your brand is.

Where “non luxury” brands go wrong trying to adopt the “luxury” approach is equating scarcity with exclusivity.

This is a shortsighted way of looking at things, and trying to apply these tactics can be potentially harmful and unethical.

Here’s how to use these tactics responsibly:

Be Transparent: Clearly communicate the limited nature of any offer – don't use fake scarcity or deceptive tactics.

Prioritize Fairness: Even with limited quantities, ensure the process is fair and accessible to your target audience.

Deliver on Value: The core product or experience MUST be excellent. Scarcity creates buzz but can't compensate for a lack of quality.

In an era saturated with choice, sometimes the most powerful offer is the one that's slightly out of reach.  

Done well, scarcity can ignite desire, transform customers into your greatest promoters, and build brands with staying power.

Alex McCan
Founder, Arco

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