If you haven't heard of Hatchimals yet, it's probably because you don't know any girls between the ages of 5 and 12 (unlikely). I happen to have a 6-year old niece so it was one of the first suggestions that came up when looking for age-appropriate toys to buy for Christmas.
My first thought was...... Furby? It does look like a remote cousin to the Furbster. But no, this is a uniquely different toy that has swept the nation in mass hysteria to ensure it's under the tree this holiday season.
As I soon discovered, these furry creatures are high in demand and would not be an easy task to get my hands on...in fact, seemingly impossible. Searching online last week, a golden nugget of information surfaced. "Toys 'R Us will be receiving a limited shipment of Hatchimals on Sunday morning." Aha! All I had to do was set my alarm for 7am on Sunday morning and make sure I got there early enough to fight off the crazy moms.
That's when it struck me. Am I really going to go stand in line, at an hour on Sunday morning I rarely see, to *potentially* get the latest toy? Who am I? I mean, I love my niece, but it seemed a bit extreme. This toy that seemingly came out of nowhere is now the most talked about and sought-after toy for the biggest spending holiday of the year. My next thought - I need to meet the marketing genius behind this!
Hatchimals & Scarcity Marketing 101: How it Works
"Scarcity, in the area of social psychology, works much like scarcity in the area of economics. Simply put, humans place a higher value on an object that is scarce, and a lower value on those that are abundant." -Wikipedia, 2016
We, as humans, are competitive by nature. We want what we can't have. We thrive on status and that status is often defined by material items.
Scarcity thrives on two key principles:
Social proof - If an item sells out quickly, we automatically assume that product is good since everyone is buying it.
"Hatchimals must be the best thing since sliced bread since they are nowhere to be found!" - Me
Commitment - if someone has committed to the idea of buying something, and then realize they cannot have it, it makes them want it even more.
"I'm going to stand outside Toys 'R Us at 7am on a Sunday morning for a chance at getting a Hatchimal!" - Also Me
Why it Works
1. It forces action - "If I don't buy a Hatchimal now, I may not get another chance in time for Christmas."
2. Customers feel like they have won something- "I did it! Victory is mine!
3. Sheer happiness will come from the purchase - "I'm going to be the coolest aunt for snagging one of these babies!"
4. Cures FOMO (Fear of Missing Out) - "That was a close call. I almost subjected my niece to being the only kid in Kindergarten without a Hatchimal."
When To Use Scarcity Marketing Tactics (beyond Hatchimals)
While it can be overwhelmingly successful, it's not always the best option. Here are some circumstances where it makes sense to employ scarcity marketing:
1. Product Launches - new, innovative product? Try only offering 100 or providing an incentive to the first 100 people who buy.
2. Live Events - Hosting a webinar? While getting registrations is great, you really want registrants to attend the live event. By promoting that there will be giveaways ONLY during the event, and you MUST attend to be eligible, you're employing scarcity tactics.
3. Social Media Contests - Social media giveaways are a great way to use principles of scarcity. Participants must act within a specific timeframe in order to be eligible to win a great prize.
4. Auctions (think Ebay) - have customers bid against each other. It drives up demand, especially if items are in short supply. Some Hatchimals (typically retailing around $50-60) are going for as much as $285 at Walmart.
Of course, if you're smart and recognize trends like this coming, you can be like the Zappa brothers on Black Friday:
For those of you wondering, I did not manage to snag a Hatchimal this weekend -- I'm still on the lookout!
Where else are you seeing scarcity marketing in action this holiday season? I'd love to hear your thoughts in the comments!
Stay tuned for Part 2 of this blog: Why Hatchimals is Crushing Content Marketing.