A handful of businesses have been successful at applying the marketing psychological strategy of creating scarcity. A great example would be that of Supreme, the street-wear brand that is worth 2.1 billion as of November 2020 after being sold to VF Corp. Its merchandise is resold at a higher price because they play by the exclusivity hook.
They sell limited products resulting in hyped demand. The more Supreme limits supply the more alluring their merchandise becomes. You will find that the prices charged for the Supreme merchandise is not over-the-top as we would assume. Prices range from $38- $138 for a t-shirt and hoodie respectively. The true money is in resale. People will buy to sell the products and because there are limited varieties you will find them making 600% profit.
And another thing, they do not do any marketing.
Yep.
They believe in word-of-mouth advertising.
Talk about thinking outside the box
They actually invented their own box
Get a text message and you're told a time to come and pick up your merchandise.
I mean if you can sell a brick, how genius is that?
In Economics, scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural. In this case, we look at supply-induced scarcity which happens when a supply is very low in comparison to the demand. Scarcity is one of the most significant factors that influence supply and demand. The scarcity of goods plays a significant role in affecting competition in any market. Because scarce goods are typically subject to greater demand, they often command higher prices as well.
A new classic example that is regarded as the unicorn in 2021 is Clubhouse. A social app connecting people through conversations using voice notes. This social media app is strictly by invite and clubhouse users can not just invite everyone they want. Existing users can only invite 2 people.
It was launched in March 2020 and is now worth $1billion with over 2 million users. It is funny that Clubhouse was not meant to be exclusive as it turned out to be. It had only two hard-working people working on it in July and they were both apprehensive about making it blow up as they feared that it will break. So their plan was to slowly bring in the audience for things to remain intact and to just grow in a manageable way.
I personally like the Clubhouse ambiance, it takes the pressure off typing and looking good for the camera. Using your voice as a medium. You are engaged in a dialogue that comes close to home to what we do every day.
We talk. We communicate. We listen and engage.
Exclusivity has a certain charm to it. It is like you are a part of a group of special people. And everyone loves to feel like a VIP.
Value can mean a price. Value can mean exclusivity. Value can mean, 'I can't get it anywhere else, and this is really something I want.' Mindy Grossman
Are they any other examples of exclusivity that have been successful across the years? Share in the comments below. Are you a Supreme or Clubhouse follower?
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