What started as quirky and strange-looking figures has transformed into an international craze delivering multi-million dollar profits for its creators. Brought to market by Chinese toy company Pop Mart, Labubus are collectible dolls often sold in “blind boxes,” adding an element of surprise to each purchase for their customers. But the real excitement lies in the limited-edition releases and strategic stock control.
Labubus aren’t mass-produced monster toys sitting idly on shelves; they’re snatched up within hours, creating a fever pitch of anticipation—and a booming resale market where some rare versions are sold for 30 times their suggested retail value.
Situations like these are not economic anomalies. They’re part of a phenomenon rooted in the powerful psychological principle of scarcity and its application in retail. Whether it’s fights breaking out at Costco over Pokemon cards, shoppers stampeding for flat-screens on Black Friday or a TikTok-fueled rush on pink Stanley cups on Valentine’s Day, perceived scarcity triggers unique challenges in consumer behavior.
What Is Perceived Scarcity?
Perceived scarcity occurs when a product is seen as limited in supply, whether or not it truly is in reality. Our minds tell us that if something is rare, it must be valuable – whether it’s a tangible good or an experience.
Scarcity triggers urgency. This urgency, according to studies, is driven by a sense of anticipated regret – that later, we will wish we had made the purchase. It can also take many forms: limited-edition items, short-time sales, invite-only access or products that are “sold out” and restocked in small batches. Even if the supply is ample behind the scenes, the perception of rarity is usually enough to influence behavior.
Examples of Scarcity in Action
One of the most fascinating examples of scarcity in action was the Supreme Brick. In 2016, the streetwear brand Supreme sold a red clay brick with their logo on it for $30 – and it sold out instantly. It shows that excellent brand marketing and scarcity can turn anything into a coveted item.
But Supreme wasn’t the first to utilize perceived scarcity, and it certainly won’t be the last. Here are some of the brands that have done it best:
The Birkin Bag: Hermès has long kept its Birkin bag supply limited – customers must be invited after years of purchase history. In the secondary market, bags can sell for over $100,000, and Hermès has capitalized on this idea of the bags being “investments”. A class-action complaint has even claimed that this sales model violated antitrust law by tying the purchase of a Birkin to buying other Hermes products.
PlayStation: When Sony released the PlayStation 5 in 2020, constrained supply due to the pandemic and chip shortages turned the console into one hot commodity. Bots bought up inventory in seconds, and fans paid double or triple on eBay. In 2024, PlayStation launched its 30th Anniversary Bundle (at $999), which was color-themed to the original PlayStation game console, released in Japan in 1994 and in the US in 1995. It sold out quickly, and it is still selling for over $3000 on eBay.
Stanley Tumblers: Once a utilitarian item for blue-collar workers, the more-than-a-century-old brand has made its products must-have status symbols thanks to social media influencers. Retailers like Target have seen multiple stampedes when they drop exclusive colors. Despite mass production, the illusion of scarcity keeps demand sky-high.
Nike Sneakers: Sneaker brands regularly harness the scarcity principle by creating “drops” of new products – with the hype amplified by media, celebrities and influencers. Nike’s scarcity history began with its collaboration with basketball player Michael Jordan in his rookie year, when the Air Jordan 1 was released to the public in 1985. Air Jordans have become the longest continuous signature sneaker line ever. Nike sneakers have caused multiple shopping frenzies by fans over the past several decades, including when Kendrick Lamar wore Nike Air DT Max ’96s to perform at the Super Bowl this year.
How Brands Use Scarcity to Drive Sales
Retailers and brands use this psychological principle to drive sales and create cultural buzz. Some of the common strategies include:
- Limited Editions: Whether it’s a seasonal Starbucks drink, a Supreme hoodie or a makeup collaboration, limiting supply makes products seem special. Brands often enhance exclusivity through serial numbering, countdown clock or invite-only access.
- Product Drops: Popularized by streetwear brands like Supreme and later adopted by sneaker brands, tech companies and even beauty labels, product “drops” create a hype cycle. A specific release time is announced, followed by a frenzy of online or in-store activity.
- Influencer Amplification: Social media and viral videos can accelerate the scarcity effect.
What Scarcity Means for the Future of Retail
In a retail world increasingly defined by abundance, scarcity is unusual, especially for Americans. But retailers aren’t following the same playbooks anymore. Tiered subscription models, like loyalty programs and exclusive memberships, are also on the rise. These will become more common, offering first dibs or early access to product drops for regular customers.
But brands should note that consumers are beginning to push back on artificial scarcity. They do not like when some brands use manufactured limits to manipulate demand, especially with bots able to snatch up merchandise, and they’re calling it out and staying away from those companies. Transparency and ethics are extremely important in this environment, and any scarcity that feels exploitative crosses the line.