SYSK TRENDING - The Power of Scarcity

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Why do limited time offers work so well? Why does a product suddenly seem more valuable when there are only a few left? And why can the mere possibility of missing out change our decisions, our spending, and even our relationships?

Scarcity is one of the most powerful forces influencing human behavior, and it's everywhere, from online shopping to social media and everyday life. That's why today's SYSK trending topic is the power and influence of scarcity. In my conversation with marketing expert Mindy Weinstein, we examine what scarcity

is really doing to our brains and how we can recognize when it's being used to influence us. We also explore the psychology behind scarcity, why it can be so persuasive, and how understanding it can help you make better decisions.

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our business with Shopify. Start your free trial at Shopify.com slash AU. One interesting way consumers, you, me, everyone, gets manipulated is through something called scarcity.

It's ingrained in us. When we think something is in short supply, it triggers and influences our decision-making. In fact, when it comes to being influenced, scarcity is arguably one of the most powerful forces, invoking a kind of primal instinct, an instinct that was essential to our ancestor's

survival, but not so much today. It is the explanation for why when there's an approaching storm, people stock up on milk and toilet paper because something tells them that these things could become scarce, even though they rarely do.

One of the leading authorities on scarcity is Mindy Weinstein. He's a marketing instructor at Grand Canyon University and the University of Denver, as well as a program leader for the Wharton School and Columbia Business School. Hi, Mindy.

Welcome to something you should know. Thank you for having me. So briefly explain what is scarcity as it applies to the way we think and make decisions. To put it simply, scarcity is some type of unavailability.

When you think about it, it's just a restriction of some type. And there can be a lot of different causes of that restriction, but it is something that is unavailable or it could even just be something that's hard to get. And I think everybody has a sense of what that's like when you go on Amazon and it says,

hurry, only two left in stock or sale ends Monday, that that's kind of scarcity. And I think people have a sense that it may be baloney too, that if you really wanted to find, they could find another one to sell you. And if you really came in on Tuesday, they'd probably match the price.

And yet people pay attention to that. They absolutely do. And I'm just going to tell you a little bit more and expand on scarcity. So I mean, I gave you the simple definition because that's truly what it is.

But there are really four different types of scarcity. And what's so interesting about it is that each one tends to have a different effect on us. And so I'll just go through them if you don't mind, just telling you a bit about them.

Sure. But we have demand-related scarcity and that is popularity. So something that's popular, it's harder to get because of that. That's where we get the best sellers or the wait list or you're trying to get into

that new restaurant that everyone else is going to, but it's very difficult. That's demand-related scarcity. And then there's supply-related scarcity. And that could be intentional.

So a lot of big brands will do drops where it's very limited and they're restricting the supply or it could be because of some type of supply shortage. Like I know that the PlayStation 5 is something that's a supply-related scarce item. And that's just because of the distribution and chip shortage is what I think I read

last. But then there's also time-related. time related is some type of limitation on the amount of time that you have. That could be something like a flash sale or if you've ever been on a website and you

see the countdown timer, that feeling that you have that you start to get anxious, that is time related scarcity because now you're competing against the clock. Then finally, there's limited edition, which is really part of supply related scarcity. With limited edition, it's different in that it can be the same product, just

different packaging or just a slightly different twist, but it's also still scarcity. And all of those areas and all those things I talked about, they have different effects on us. And that's part of why I wanted to study scarcity. My dissertation, believe it or not, was on the power of scarcity. And that's just really what catapulted this whole thing because

I realized how complex it really was. And so what is the effect that people have? Why is it that we pay attention to that? Why does something become more desirable when it's harder to get? That is what is so surprising.

So during my studies and even through some testing that I've done, there is a reaction to when something is unavailable to us. And that actually dates back to early mankind when people were trying to survive and there were scarce resources.

Our brains are hardwired and they're still wired to overcome any type of scarcity.