Scarcity is a powerful psychological force. It compels consumers to change their behavior while simultaneously raising the value of products and services. However, putting locational, temporal or inventory limitations in place may seem contrarian at a time when ecommerce has made shopping an increasingly frictionless, convenient transaction.

This report explores three types of scarcity—location, product and time—to consider how brands and retailers are manipulating supply and demand mechanisms and to what end. Though the ethos behind supply-driven models such as Amazon’s is based on more product availability, which means more customers and higher revenue, scarcity has historically played into some of the most successful and long-term business models and brands, from the diamond market to Supreme.

More recently, the digitization of the consumer landscape has raised new questions about how to create new scarcity in an online world, which the music and film industries are attempting to tackle in the age of streaming, and retailers like Amazon are using to drive membership and customer loyalty.

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