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E-commerce, Logistics, and Small Business Management
The Power of Urgency in Marketing
Urgency is a highly effective marketing tactic which can significantly boost conversion (and even average order value) by prompting anxiety, the fear of missing out (FOMO), and rapid (impulse-based) purchasing decisions. Urgency tends to appear in one of two forms:
- Front-end urgency which leans on firm product-release schedules and scarce quantities.
- Back-end urgency which is rooted in time-limited and quantity-limited sales (commonly seen during the holiday retail season).
In this article, we explore both forms of urgency through an in-depth look at Supreme on the front-end and standard dropshipping tactics on the back-end.
Front-End Urgency: The Case of Supreme
Supreme originally came onto the scene as a trend-setting brand for NYC-based skate culture; however, in recent years, its products have become highly coveted by athletes, influencers, and the pop culture masses in general. Supreme’s marketing leverages front-end urgency and scarcity-driven tactics to encourage customers to act (very) quickly. Key features:
- Merchandise drops: Supreme utilizes merchandise (merch) drops – releasing new items in limited quantities every week at the same time in the US, EU, and Japan. Drops often sell out within seconds. Yes, seconds.
- Purchase restrictions: Supreme only allows customers to purchase one of each style. This helps Supreme control the prestige of their brand and makes it difficult for resellers to operate at scale.
- Product scarcity: Once Supreme releases an item, it will never be re-released. Supreme does occasionally restock; however, restocking is rare and never occurs for the most popular items.
Why does it work?
- Limited quantities: Planned scarcity of highly-coveted items helps to drive explosive demand.
- Social influence: For those who succeed in getting their hands on an item, a heightened sense of prestige and social influence can trigger FOMO in others (who often become inspired to participate in future drops).
- Customer empowerment: Many customers engage with brands that drop merchandise so they can turn the items for a hefty profit on the secondary market – creating opportunity, a sense of empowerment, and fanatical demand.
The challenges for imitators:
- Logistics: By utilizing drops, Supreme has to be positioned to move a large quantity of merchandise in a very short period of time – each and every week. This can be extremely challenging from the standpoint of logistics, so brands engaging in this type of urgency need to be weeks or months ahead in their planning – for each and every drop.
- Funds: Creating marketing hype around and designing, producing, and positioning items for a merchandise drop requires a heavy pre-sale investment of cash and other resources – an investment which Supreme is able to make, but which is out-of-reach for many smaller brands.
- Following: An obvious but often overlooked point: drops only work well once a large enough base of brand fanatics is already in place. Limited quantities of things for which nobody is clamoring aren’t likely to move the needle much for a fledgling brand.
Back-End Urgency: The Case of Most Dropshippers
Whether knowingly or not, most dropshippers leverage back-end urgency in their marketing plans. Key features:
- Limited time: Dropshippers often utilize time-constraints on discounts (or, at least, the perception of both time-constraints and discounts – which is a whole different story) to drive conversion. It’s not uncommon, for instance, to see aggressively-worded sales banners, countdown clocks, and streamlined “Buy Now” processes leveraged in an effort to spur quick actions.
- Limited quantities: Dropshippers often utilize limited quantities (or, again, the perception of them) to drive conversion. This can often be seen throughout the sales funnel: from ad language to product page prompts and post-purchase email sequences.
Why does it work?
- FOMO: Customers want to both take advantage of good deals and also engage with brands which appear to be popular.
- Conversion: Urgency encourages people to act with immediacy – and it culminates in higher conversion rates.
The challenges for imitators:
- Customer conditioning: To be effective, prices have to be reduced – an approach which, if overused, may condition customers to wait for price reductions before initiating their purchases.
- Brand reputation: Brands which aggressively utilize back-end sales tactics tend to be viewed as cheap, discount brands – a reputation which, once earned, is hard to shed.
- Dropshippers: Unfortunately, the world of dropshipping includes far too many participants who have no business at all being in business; therefore, legitimate – especially, non-dropshipping-based – brands risk being mistaken for their not-so-dependable competitors when they adopt similar marketing strategies.
Urgency is a remarkably powerful concept in marketing, but it must be leveraged carefully – with a full understanding of the challenges and possible medium- to long-term consequences for brands which utilize it.