By: Jenna Beane
As the market becomes increasingly competitive, brands are turning to new strategies to boost sales and capture consumer attention. One effective strategy is the scarcity mindset, which utilizes limited-edition drops with small product quantities to create a sense of urgency among consumers. By building excitement around new products, brands can pressure consumers to buy quickly, capitalizing on the fear of missing out (FOMO) that comes with the possibility of items selling out and not returning. This approach is just one of many tactics marketers employ to enhance desirability.
Two brands utilizing this tactic include Parke and Set Active. Parke is a rising brand that specializes in comfortable, trendy loungewear. Set Active, based in Los Angeles, creates stylish, high-quality activewear. Both brands resonate with Gen Z and are gaining traction on TikTok. In October, the two companies collaborated to launch a limited-edition crewneck, capitalizing on their shared target audience. They effectively built hype for the drop by using teasers on social media and featuring posts from influencers showcasing the upcoming release.
The collaboration was set to drop at 1 p.m. EST, and within minutes, the entire collection sold out. Many customers reported issues with the website crashing at the time of the release, prompting users to take to the brands’ comments to voice their complaints about the campaign. Customers also expressed frustration over the lack of stock for paying customers while noting that the brands had ample inventory to gift to social media influencers.Parke and Set Active are not the first brands to utilize the scarcity marketing strategy. Apple frequently employs this tactic by generating anticipation for new iPhone models. While they do not release small quantities of their products, they spend months teasing new releases and tapping into consumers’ emotional biases. Starbucks also uses this marketing strategy, particularly with their limited-edition, limited-quantity red cups released each year.
These tactics spark an interesting conversation about the ethics of scarcity marketing. Critics argue that this strategy encourages impulse buying without considering the financial strain on consumers, relying on manipulation and pressure. However, marketers contend that it is merely another tool in their toolkit to drive purchasing behavior and gain a competitive edge in an increasingly competitive market.
In the case of Set Active x Parke, the collaboration successfully sold out its products and increased demand to the point of opening a second pre-order option for customers who missed out on the first drop. However, the brands now face fallout from frustrated customers who were unable to purchase the products. Marketers must carefully weigh the pros and cons of using the scarcity mindset. Moreover, they need to balance the fine line between boosting sales and maintaining a positive image with consumers.