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Transcript
- Lucas: So there's this thing Nike does that looks like a bug but is actually a feature — they deliberately make it hard to buy their most popular sneakers. Luna: You mean the whole SNKRS app lottery thing? Where you enter a draw and almost never win? Lucas: Exactly. And people hate it — there are Reddit threads with thousands of complaints about taking L's on SNKRS. But Nike keeps doing it because scarcity isn't a bug, it's the entire point. Luna: So they're basically manufacturing frustration. How does that not kill brand loyalty? Lucas: Because the frustration is paired with an incredibly high reward when you do hit. It's variable reward scheduling — the same psychology that makes slot machines addictive. When you finally get that W on a pair of Travis Scott Air Jordan 1s, the dopamine hit is massive. And the resale value reinforces it: those shoes retail for around $175 but instantly trade for $700 on StockX. Luna: Right, so the scarcity isn't just about making people want them more — it also creates this secondary market that validates the hype. If you can flip a pair for three times what you paid, the brand looks even more desirable. Lucas: Exactly. And Nike is very careful about how much supply they release. They never say exactly how many pairs of a limited drop exist, but analysts estimate some collaborations are as few as 10,000 pairs globally. For a brand that sells hundreds of millions of shoes a year, that's a rounding error. But it generates billions in earned media — every unboxing video, every resale listing, every 'I caught a W' post on Instagram is free advertising. Luna: So what's the actual revenue impact? I know the SNKRS app is huge. Lucas: SNKRS alone is estimated to drive around $2 billion in annual sales for Nike. And that's just the direct channel — the halo effect on their mainline products is enormous. When you can't get the limited shoe, you might buy a similar colourway from the general release. It's like a gateway drug. Luna: But there's a risk, right? If customers feel like they're always losing, eventually they might just give up on the brand entirely. Lucas: That's the big question. And Nike seems to be aware of it — they've started doing more 'surprise drops' where they release a shoe with no announcement, so bots have less advantage. And they've expanded their membership program to give loyal customers early access. But the core model is still scarcity. Luna: It reminds me of how Supreme built its whole brand on limited drops. But Supreme eventually lost some of that heat when they over-expanded. Do you think Nike could face the same? Lucas: Nike is much bigger and more diversified, so they have more room. But yeah, there's a saturation risk. If every other week there's a 'limited' drop, limited starts to feel normal. The key is that Nike ties scarcity to genuine cultural moments — a Travis Scott collaboration, an Off-White design, a retro Jordan that hasn't been re-released in a decade. It's not just 'this shoe is rare,' it's 'this shoe represents a specific cultural artifact.' Luna: That's a good point. The scarcity is reinforced by storytelling. Like the Air Jordan 1 'Chicago' colourway — it's iconic because of Michael Jordan, not just because it's hard to get. Lucas: Right. And that's the lesson for smaller brands. You don't need to create a sneaker resale market to use scarcity effectively. You can do time-limited offers, early access for your most engaged customers, or limited-edition packaging. The principle is the same: when something is perceived as scarce and valuable, demand goes up. Luna: But you have to be careful not to overdo it. If a small brand runs a 'limited edition' every month, it stops being special. Lucas: Exactly. Scarcity only works if it's genuine and infrequent. And honestly, that's something we try to keep in mind with this show too. We don't run ads, we don't have sponsors — and that's intentional. It keeps the conversations honest. But it also means the show relies on listeners who find value in it. Luna: Yeah, and it's really simple. If these episodes have helped you think differently about marketing, a couple of dollars a month makes a real difference. It's buy me a coffee dot com slash fexingo. Lucas: And we genuinely appreciate that. Anyway — back to scarcity. Let's talk about one brand that does this really well without the sneaker hype machine: Glossier. Luna: Oh interesting. Glossier uses scarcity but in a totally different way — they do limited-edition product drops tied to seasons or collaborations, but they also use waitlists to gauge demand before committing to a full production run. Lucas: Right. So they're using scarcity as a risk-management tool. They don't want to overproduce and end up with unsold inventory. By creating a waitlist and then releasing a limited batch, they ensure they sell out and create buzz at the same time. It's scarcity without the frustration because if you're on the waitlist, you're almost guaranteed to get it. Luna: That's a smarter approach for most businesses. The Nike model requires massive brand equity to pull off. Glossier's model — limited drops with waitlists — is more accessible. Lucas: Exactly. And it works for them. Their 'You Look Good' lipstick launch in 2024 sold out in under 48 hours, and they used the waitlist data to decide how many to produce for the next run. It's scarcity with a feedback loop. Luna: So what's the takeaway for a small business owner listening? How do you actually implement this without being Nike? Lucas: Start with time-bound offers. Instead of a permanent discount, run a 48-hour flash sale. Or create a 'first batch' limited run of a new product and market it as exactly that — the first batch. People love being early adopters. You can also use early access tiers for your email subscribers. Give them 24 hours to buy before you open it to the public. Luna: And make sure you communicate why it's limited. If it's because you handmade a small batch, say that. If it's because you're testing a new formula, say that. The story matters. Lucas: Absolutely. The worst thing you can do is create artificial scarcity without a reason. People can smell that. But if there's a genuine constraint — production capacity, seasonal ingredients, artist collaboration — then scarcity feels authentic and actually builds trust. Luna: So scarcity is a tool, not a strategy. It works best when it's part of a larger story about quality, craftsmanship, or community. Lucas: Exactly. And Nike knows that better than anyone. Their scarcity isn't just about limiting supply — it's about building a mythology around certain products. The Air Jordan 1 'Bred' banned by the NBA? That story is worth more than any ad campaign. Luna: Right, the 'banned' colourway. That scarcity was originally accidental — the NBA fined Michael Jordan for wearing them — but Nike turned it into a marketing legend. Lucas: And they've been re-releasing that shoe for decades, each time with limited quantities. The 2016 'Banned' release was only 5,000 pairs in the US. People camped out for days. And the story made it worth it. Luna: So the lesson is: scarcity needs a narrative. Without a story, it's just a manipulation tactic. Lucas: Exactly. And that's the line every brand has to walk. Use scarcity to create excitement, but always tie it back to something real. Otherwise, you're just burning the trust you've built. Luna: And that trust is a lot harder to rebuild than a pair of sneakers. Lucas: Yeah, exactly. So if you're thinking about using scarcity, start with the story. Then figure out the supply. That order matters. Luna: Great advice for any marketer, whether you're selling sneakers or software. Lucas: Alright, that's it for this episode. We'll be back next time with another marketing deep dive.