Scarcity Marketing

Summary

Down to Business English – Episode Summary

Episode Title: Scarcity Marketing
Date: June 18, 2025
Hosts: Skip Montreux & Dez Morgan

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Episode Overview

This episode dives into the world of scarcity marketing—a widely used marketing strategy that leverages limited supply, exclusivity, and consumer psychology to drive demand and encourage quick buying decisions. With the recent release of the Nintendo Switch 2, Skip and Dez discuss how companies intentionally (and sometimes unintentionally) use scarcity to build hype and boost sales. They explore real-world examples from Nintendo, luxury fashion, and the viral Chinese toy company PopMart, all while unpacking key vocabulary and marketing concepts relevant for ESL/EFL business professionals.

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Key Discussion Points & Insights

1. Nintendo Switch 2 Hype and Scarcity

[01:17–03:43]

• Anticipation & Demand: The Nintendo Switch 2 release sparked frenzied demand, with stores in the US and Japan experiencing rapid sell-outs and even requiring lotteries for purchase opportunities.
  • “Stores in the US opened just after midnight on June 5th to allow excited fans in. Here in Japan, gamers had to enter a lottery just for the possible chance to be able to purchase one.” (Skip, [02:31])
• Record Sales: Nintendo sold 3.5 million units in the first four days after launch.

2. Introduction to Scarcity Marketing

[03:43–04:47]

• Definition:
  • “Scarcity marketing… is a strategy used by marketers to drive demand and encourage immediate purchases by limiting the availability of their product by quantity, time, or exclusivity.” (Skip, [04:08])
• Consumer Psychology: Scarcity leverages the human impulse to buy something simply because it might soon be unavailable.

3. The Psychology Behind Scarcity

[04:47–09:32]

• FOMO (Fear of Missing Out):
  • “The term for the feeling you just described is FOMO, the fear of missing out. FOMO is a strong purchase motivator.” (Dez, [04:52])
• Artificial Scarcity: Sometimes, limited supply is manufactured rather than real, to create a sense of urgency.
• Loss Aversion:
  • “People prefer not to lose something of value over gaining something of value.” (Skip, [07:05])
  • Real-life signage (“Out of stock”) in stores heightened perceptions of scarcity and fueled customer frustration and demand.
• Social Proof:
  • “If others are buying something, then I should be buying it too, right?” (Dez, [08:11])
  • Real examples—pop-up notifications on booking sites—amplify urgency and desirability.
• Winner’s Privilege: Owning a scarce product (e.g., getting a Switch 2 early) makes one feel part of an exclusive club.
  • “Imagine you were lucky enough to get your hands on a Switch 2, but none of your friends were. You would now be a member of the exclusive club of Switch 2 owners.” (Skip, [09:06])

4. Real-World Example: Louis Vuitton’s Cherry Blossom Collection

[09:43–10:58]

• Limited Edition and Exclusivity: Collaborations and region-specific releases (e.g., Louis Vuitton & Takashi Murakami in 2003) harness both scarcity and social cachet.
  • “A double whammy. A limited edition and only available in Japan. Double the exclusivity.” (Dez, [10:06])
  • The collection was mostly available internationally, but some were exclusive (“some scarves and… hair accessories”).
• Continued Relevance: Louis Vuitton revived the collection in spring 2025, underscoring the enduring power of limited-edition offers.

5. Case Study: PopMart & ‘Labubu’ Dolls – Scarcity on Steroids

[11:10–15:58]

• Viral Toy Trend: Celebrity endorsements (e.g., K-pop’s Blackpink, Dua Lipa, and Rihanna) sparked international PopMart fever.
  • “Popmart got a celebrity endorsement. Another good marketing strategy it is.” (Skip, [11:50])
• Record-Breaking Auction: A human-sized Labubu doll sold for £110,000 in Beijing ([12:13]).
• Scarcity Tactics in Play:
  • Blind Boxes: Buyers don’t know which toy they’ll get—driving collectors to purchase repeatedly.
  • Super Rare Editions:
    • “The latest super rare character is rainbow and only 1 out of 72 shoppers will be able to get it.” (Dez, [13:19])
  • Drop Culture: Sudden new stock releases (“drops”) generate frenzy and long lines, sometimes even fights.
    • “There have been reports of long queues in the US and the UK...fans got into physical fights over a doll.” (Dez, [15:28])
  • International Exclusivity: Special models released only in specific countries create region-based demand and collectability.

6. Vocabulary Spotlight: Marketing Terms Unpacked

[16:43–20:54]

The hosts explain several advanced business expressions with context and examples:

• To Lean Into (Something): Fully embracing a situation for strategic benefit.
  • “Nintendo was leaning into the scarcity of computer chip to increase demand for the Switch 2.” (Skip, [17:22])
• To Coin a Term: Inventing a new word or phrase.
  • “The term loss aversion was coined in 1979 by two psychologists, Kahneman and Tversky.” (Dez, [18:56])
• To Juice Up: Making something more exciting or intense.
  • “The super rare models in the Labubu product line juice up the expectations of fans.” (Skip, [20:23])

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Notable Quotes & Memorable Moments

• “When Nintendo delivered retailers their allocated number of Switch 2s, the delivery came with a professionally laminated sign that read ‘Out of Stock.’” (Skip, [05:50])
• “Marketing is a brutal art, it seems.” (Dez, [06:44])
• “I suddenly feel like I’m not the one making my purchasing decisions.” (Dez, [09:01])
• “I recently read about a product drop in the UK where tensions rose to the point where some fans got into physical fights over a doll. And that is a good thing in the world of scarcity marketing.” (Dez, [15:28])

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Timestamps for Key Segments

• Nintendo Switch 2 Frenzy: [01:17–03:43]
• What is Scarcity Marketing: [04:04–04:47]
• Consumer Psychology—FOMO, Loss Aversion, Social Proof: [04:52–09:32]
• Exclusivity & Luxury Example (Louis Vuitton): [09:43–10:58]
• PopMart Case Study: [11:10–15:58]
• Vocabulary Deep Dive: [16:43–20:54]

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Tone & Style

Conversational, engaging, and educational—the hosts use real case studies, relatable consumer scenarios, and vivid analogies. The discussion is peppered with humor and practical explanations, making advanced marketing concepts accessible for non-native English-speaking audiences.

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Summary Takeaway

Scarcity marketing is a powerful tool for driving sales and hype, rooted deeply in consumer psychology. The Nintendo Switch 2’s hotly anticipated launch, Louis Vuitton’s exclusive collections, and PopMart’s viral toys all showcase how companies can engineer demand by limiting access and playing to our deepest desires not to miss out. As consumer trends evolve, so too do the methods marketers use to keep us wanting—and buying—more.

Transcript

[A]

From Tokyo, Japan and Changsha, China, this is down to Business English with your hosts, Skip Montreux and Des Morgan.

[B]

Hello, Des. And hello to all of our listeners. Welcome back to down to Business English.

[C]

Greetings, Skip. And greetings to everyone listening today. I hope everyone is well. And how are you, Skip?

[B]

Lots of stuff going on.

[C]

Like what?

[B]

Oh, don't get me started. I'm in the middle of yet another textbook project with deadlines looming next month.

[C]

That's the thing about writing textbooks. There always seems to be a deadline just around the corner.

[B]

That there is.

[C]

On top of that, you have down to Business English episodes to keep up with and your own clients to prepare classes for. I have to say, Skip, you're one of the busiest people I know.

[B]

I don't think so. I know for a fact that you too are knee deep in your own projects.

[C]

Well, let's not talk about that. Keep calm and carry on is my motto.

[B]

You are the perfect example of grace under pressure, Des. Thank you. But speaking of my students, a big story among many of them this month has been the release of The Nintendo Switch 2.

[C]

The video game platform.

[B]

That's right.

[C]

And that is big news because.

[B]

Because the Switch 2 is the first upgrade since the original Switch was launched eight years ago.

[C]

Sorry, Skip, I'm not really into video games that much. What exactly is the Nintendo Switch?

[B]

Well, the Nintendo Switch is a hybrid video game consol. You can use it as both a traditional home console connected to your television or as a portable handheld device.

[C]

Ah, it switches.

[B]

Thus the name.

[C]

I see. So the release of the Switch 2 has been widely anticipated by its fans.

[B]

It has been. But here's the thing. The new Switch is in short supply worldwide, which makes it very, very tricky to get your hands on one.

[C]

It's just been released and it's already difficult to get. Really?

[B]

That's right. Stores in the US opened just after midnight on June 5th to allow excited fans in here In Japan, gamers had to enter a lottery just for the possible chance to be able to purchase one.

[C]

That really built the hype then.

[B]

It did. But apparently Nintendo sold a record 3.5 million units worldwide in the first four days after the launch.

[C]

Incredible. Do you think there is an actual shortage of devices or do you think Nintendo is holding black supply to create some additional demand?

[B]

Are you asking if Nintendo is utilizing a marketing practice known as scarcity marketing?

[C]

I am.

[B]

Great lead in question, Des, because as you know, that is our business topic today. And we are going to get into all of that that we are today

[C]

on down to Business English Skip is going to report on the factors that go into scarcity marketing, and I have a great example from China of the practice in action.

[B]

So let's do it. Let's get D2B down to business with scarcity marketing. What is it, how does it work, and why scarcity sells?

[C]

So, Skip, how would you define scarcity marketing?

[B]

Scarcity marketing, or artificial scarcity marketing as it is sometimes referred to, is a strategy used by marketers to drive demand and encourage immediate purchases. And they do this by limiting the availability of their product by quantity, time, or exclusivity.

[C]

You walk into a store, see a product on the shelf, and because you know supplies are limited in some way, you feel you should buy it while you can, even though you're not actually sure you even wanted to buy it in the first place.

[B]

That is pretty much the psychology behind it. Yes. The term for the feeling you just

[C]

described is fomo, the fear of missing out. FOMO is a strong purchase motivator that it is.

[B]

Now, artificial scarcity marketing assumes that their is indeed enough supply of the product, but that supply is being artificially held back from consumers.

[C]

So, returning to my earlier question, is there a real shortage of Nintendo Switch 2s or are they holding them back?

[B]

In Nintendo's case, I'm not sure. After all, there is a worldwide shortage of semiconductor chips at the moment, so more than likely there aren't any warehouses full of Switch 2s. However, I do think that Nintendo is leaning into the scarcity of those chips to drum up demand for their device.

[C]

What makes you say that?

[B]

When Nintendo delivered retailers their allocated number of Switch 2s, the delivery came with a professionally laminated sign that read out of stock.

[C]

Something the retailer could use once their Switch stock had all sold out.

[B]

That's right, but it also resulted in consumers in some stores assuming it was a marketing ploy and that there were more switches hidden in the stock room in the back, which almost certainly was not the case.

[C]

But of course fans wouldn't know that, so they keep coming back to the store. I feel that strategy didn't go down very well with retail stuff.

[B]

You know, it didn't go down very well with the Switch fans either. There have been many reports of gamers in the US getting quite angry and demanding to see what was behind the

[C]

stockroom doors, which again, adds to the hype. Marketing is a brutal art, it seems.

[B]

I'm not sure if it's an art, but it may be a science. There is a lot of psychology behind scarcity marketing. One concept is known as loss aversion.

[C]

Loss aversion?

[B]

Yeah. It is a term that was coined in 1979 by two psychologists, Daniel Kahneman and Amos Tversky. The idea behind the concept is that people prefer not to lose something of value over gaining something of value.

[C]

In other words, we tend to feel worse about losing $100 than then we would feel good about gaining $100.

[B]

That is a simple way to put it. Yes.

[C]

But wait. In terms of marketing, you haven't bought anything yet, so technically you haven't lost anything.

[B]

True. But let's say you walk into a store and there's a big sign that says only three left in stock. Loss aversion kicks in because I fear

[C]

I might lose out if I don't buy it right now.

[B]

Exactly. That is loss aversion in action.

[C]

An interesting marketing approach.

[B]

Another concept of scarcity marketing that comes from psychology is social proof.

[C]

Essentially, if others are buying something, then I should be buying it too, right?

[B]

And if you link social proof to loss aversion, the two concepts strengthen each other.

[C]

Like when you're on an airline or a hotel booking site and you get a pop up message saying 14 other customers have viewed this room or this flight in the last 24 hours.

[B]

That is a perfect example. When you see a message like that, how does it make you feel?

[C]

It makes me feel like I had better make that purchase right now because if I don't, someone else will get it and I'll miss my chance.

[B]

That feeling you are describing right there is a result of both concepts, loss aversion and social proof working in tandem.

[C]

I suddenly feel like I'm not the one making my purchasing decisions.

[B]

You and I both. A further scarcity marketing concept is winner's privilege. Imagine you were lucky enough to get your hands on a Switch 2, but none of your friends were. You would now be a member of the exclusive club of Switch 2 owners.

[C]

I'm a winner, not like all my loser friends.

[B]

And that is a privilege. High end brands take this winner's privilege concept one step further by releasing limited edition products.

[C]

Of course, from my time in Japan, I remember Louis Vuitton marketing a limited edition bag with a cherry blossom design on it. Do you remember that?

[B]

I do. That collection was a collaboration between Louis Vuitton and Japanese pop artist Takashi Murakami and it was released in 2003.

[C]

A double whammy. A limited edition and only available in Japan. Double the exclusivity.

[B]

Well, that is not completely accurate. Yes, it was a limited edition, but the main collection was in fact available internationally. However, you are right. There were some parts of the collection I think some scarves and some some hair accessories that were exclusive to the Japanese market.

[C]

Is that right? I always thought it was only available in Japan.

[B]

In any case, it is a good example of scarcity marketing and it was a very successful campaign. So successful in fact that Louis Vuitton just reintroduced a new limited edition cherry Blossom collection this past spring.

[C]

Ah, that I didn't know.

[B]

Now that everyone has a good understanding of what scarcity marketing is, why don't you tell us about this Chinese business that uses some of these strategies?

[C]

Absolutely. Popmart is the name of a toy company that founded in Beijing in 2010. They sell a variety of plush toys that can be used to accessorize your bag. Like a backpack or a shoulder bag.

[B]

Hmm. I don't think I have ever heard of them.

[C]

Well, I think that's going to change very soon.

[B]

Oh really? What makes you say that?

[C]

Even though they've been around for a while, they recently went viral across Asia when a member of the girls K pop group Blackpink started decorating her bags with popmart's Labubu Monster Elf figures. Ah.

[B]

Popmart got a celebrity endorsement. Another good marketing strategy it is.

[C]

And just before we sat down to record today, I saw a headline on the BBC that a human sized Labubu doll sold at auction in Beijing this week for a record £110,000.

[B]

Wow. That's like £150,000 for a doll.

[C]

Apparently it is now the most expensive toy of its kind in the world.

[B]

I think you are right, Des. We all might be hearing more and more about popmart and their. What did you say they are? Labubu dolls.

[C]

That's right. But let's look at how PopMart markets these toys. Their first strategy is to sell them in blind boxes.

[B]

A blind box. So you don't know which monster elf you are going to get until you pay for it and take the box home.

[C]

Which increases your anticipation of the unboxing while at the same time encourages you to buy again if you don't get the character you wanted.

[B]

Kind of like playing a scratch and win lottery ticket. You could win a dollar or you could win $100,000. It just comes down to luck.

[C]

Plus there is a super rare Labubu model in the mix.

[B]

Super rare.

[C]

The latest super rare character is rainbow and only 1 out of 72 shoppers will be able to get it. That really juices up the anticipation.

[B]

I can imagine.

[C]

Also, popmart has opened shops all over China. But if the two shops in Changsha are anything to go by, they are likely to be almost always sold out of the most in demand products.

[B]

Step one Celebrity endorsement. Step two Limited edition products. And step three Artificial scarcity. I see all the strategies at work

[C]

here and there's one more step at play. Step 4 Drop culture.

[B]

Drop culture.

[C]

That's when a limited number of toys are suddenly delivered or dropped into a store, but they sell out immediately.

[B]

And popmart does this?

[C]

Oh, you bet they do.

[B]

That is some genius marketing strategies on their part.

[C]

And it doesn't stop there. Popmart has limited edition models on the international market. There is Labubu, Thailand only, Singapore only models, and so on.

[B]

So this is mainly a trend in Asia.

[C]

Actually, Labubu dolls are now available in selected countries worldwide. And as they expand globally, popmart returned to step one of their marketing strategy.

[B]

Step one Celebrity endorsement.

[C]

When they opened stores in the us, Canada and the uk, British singer Dua Lipa and none other than the world famous Rihanna started to be seen in public with Labubu dolls on their bags.

[B]

And I'm guessing these newly opened US and UK popmart stores don't actually have any inventory of these monster elves.

[C]

Only when there is a limited drop.

[B]

I imagine fans line up outside all night when they hear there's going to be a drop.

[C]

There have been reports of long queues in the US and the uk. In fact, I recently read about a product drop in the UK where tensions rose to the point where some fans got into physical fights over a doll.

[B]

And that is a good thing in

[C]

the world of scarcity marketing. I guess it is. But in all fairness, in response to the violence, popmart did take the Labubus off the shelves for the safety of

[B]

their customers, while at the same time increasing the scarcity value even more. All of this for a bag accessory?

[C]

Hard to believe, but true.

[B]

I'm not sure I would ever go that crazy over a consumer item.

[C]

What are you talking about, Skip? Are you telling me that an Apple fanboy like you has never stood in line in front of an Apple store overnight waiting for the release of the latest iPhone?

[B]

You know, as much as I love my Apple products, I can proudly say I have never done anything like that.

[C]

If you say so. But I am skeptical.

[B]

Well, on that note, I think it is time for us to get D2V down to vocabulary. Our first item on D2V today is the expression to lean into something. When you lean into something, you fully accept or embrace a situation. Especially in order to make the most

[C]

of it or take advantage of the situation to gain some benefit.

[B]

In the story, I said that Nintendo was leaning into the scarcity of computer chip to increase demand for the Switch

[C]

2, meaning that Nintendo accepted the chip shortage and used it to their advantage. They turned the situation into a marketing strategy to boost interest in the Switch 2.

[B]

Exactly. Can you give us another example using to lean into?

[C]

Sure. Do you know that Volvo cars perform very well in crash testing?

[B]

Yes, I did know that Volvo has a great reputation for being a safe car.

[C]

Well, Volvo leans into the reputation in their advertising marketing their automobiles to families who want to keep their children safe.

[B]

You do see a lot of Volvo ads that focus on safety.

[C]

But some studies show that drivers of Volvos take more risks because they feel so safe and that can lead to more accidents.

[B]

Which of course Volvo chooses not to feature in their marketing. What's our next word?

[C]

Our next phrase is to coin a term or coin an expression. This means to invent a new word or phrase.

[B]

The word coin in this expression comes from the idea of coining money, like making new coins at a mint. So when you coin a term, you are creating something new, just like making a brand new coin.

[C]

In the story Skip mentioned, the term loss aversion was coined in 1979 by two sites, psychologists Kahneman and Tversky.

[B]

In other words, they invented the term loss aversion.

[C]

Do you know any other terms that have been coin Skip?

[B]

There's a lot of debate about who exactly coined the word selfie, but most people agree it became popular on Australian social media around 2002.

[C]

I have never been a fan of selfies. I personally never take them.

[B]

I don't believe that for a second. Des. I'll bet there is at least one selfie hidden on your smartphone.

[C]

Trust me, there isn't. What's next on our list?

[B]

Our final DTV item today is the phrasal verb to juice up. When you juice something up, or when something is juiced up, you are making something more exciting, powerful or intense.

[C]

Imagine yourself in the morning just after getting out of bed. You're still half asleep, but then you drink a big glass of orange juice full of vitamin C and suddenly you're full of energy and ready to meet the day.

[B]

Very nice mental image, Des.

[C]

It should be. I go through that routine every morning.

[B]

In today's report, Des noted that the super rare models in the Labubu product line juice up the expectations of fans. In other words, the possibility of getting one of those rare dolls creates a lot of excitement for the fans.

[C]

You also hear this expression in the office. For example, if you're giving a presentation, you can juice it up by adding visuals or telling a story to make your point more interesting for your audience.

[B]

A great way to juice up your English progress is by becoming a member of D2B English.

[C]

Another fine example.

[A]

Would you like to help down to Business English Reach more people wanting to improve their business English skills? Follow down to Business English on Apple Podcasts, YouTube, Music, Spotify, or any place podcasts are found. Leave a rating and a review and tell everyone how much you enjoy the show.

[B]

And that wraps up our look at scarcity marketing. Des that Pop Mart example was a perfect case study. I really learned a lot and I

[C]

didn't realize just just how much psychology goes into making people feel like they need to buy something right away.

[B]

A lot goes into scarcity marketing strategies, but it clearly works.

[C]

Yeah, there's no doubt about that.

[B]

Before we go, a quick heads up to all our DTV members and Apple Podcast subscribers. We have got a bonus down to Vocabulary episode coming your way very soon.

[C]

That we do. In that D2V episode, we'll be looking at five more keywords and phrases that came up in today's report, all of them especially useful when talking about marketing, branding and consumer behavior.

[B]

Those expressions are to be knee deep in something, hype, exclusivity, an allocated number of something, and in tandem.

[C]

If you're a D2B member, you'll find the bonus episode in your private podcast feed, so make sure you are subscribed to that.

[B]

If you're not already subscribed, just copy the podcast feed link from your member account page on the DTB website and paste it into your preferred podcast app

[C]

and Apple Podcast subscribers. For you, there is no need to lift a finger. That bonus episode will land in your Apple Podcast app automatically as soon as it's released.

[B]

And if you're not yet a DTB member or Apple Podcast subscriber and you have been enjoying down to Business English, now is a great time to get on board and support the show.

[C]

Apple Podcast subscribers get all of our bonus episodes right in their feed, and D2B members not only get that, you also have access to full PDF transcripts and our interactive audio scripts, which are

[B]

fantastic for shadowing practice. To sign up as a D2B member directly on our website, just head over to d2benglish.com membership and sign up today.

[C]

And if you'd rather subscribe through Apple Podcasts, just go to the down to Business English show page in the app and tap subscribe. You'll even get a seven day free trial to check things out.

[B]

Thanks for listening everyone. See you next time.

[C]

Bye Bye.

[A]

Down to Business English Business News to improve your business English.