Scarcity and Abundance blog by Nicola Warwick

Unethical Scarcity

11th March 2026

Author: Nicola Warwick

10 minute read

Scarcity and Ethics

The lens of consumer discernment is turning more and more towards trust and ethics.

This blog explores the tension between scarcity and ethics; how the psychological manipulation of consumers clashes with ethical integrity - with cost outweighing the benefits.

There are helpful checklists for different organisation types and the advantages of moving into an abundance mindset.

Customer discernment describes the ability of consumers to critically evaluate, differentiate, and select products or services.

Deliberate, informed and value conscious

As the leader of an organisation, you may already have your own data, anecdotes, or a nagging feeling that your customers are part of a clear and growing trend demanding more information and better quality in products and services.

As a customer yourself, you too are likely becoming more discerning.

Since the 1970s, consumer spending has grown in real terms; impacted by many factors including increased disposable income, access to credit, and online retail and digital payment.

Last summer, McKinsey & Company published their insight article, 'State of the Consumer 2025: When disruption becomes permanent', looking at habits that have endured from the pandemic crisis-era. According to their research, trends in the relationship between sentiment and spending has changed, with growing customer discernment perceived in expectations for value and convenience.

Buying Behaviour Linked to Ethical Conduct

The internet has enabled consumers to easily research products and read service reviews.

Customers are becoming increasingly careful in their buying behaviour - deliberate researched and value-conscious. It's not only financial value, but value alignment with ethical practices.

We all need to understand what makes our customer place their trust in us and what makes what we offer valuable, what builds consumer trust and what breaks it.

- Nicola Warwick

Discernment and trust

The UK's Institute of Customer Service found seven dimensions that help organisations build a model for customer trust, noting that 'measures of an organisation's ethical conduct - doing the right thing in its business practices - in fact make the strongest single contribution, helping build a latent feeling of trust in a growing number of customers'.

Deloitte states '...that trusted companies outperform their peers by up to 400%, that customers who trust a brand are 88% more likely to buy again, and that 79% of employees who trust their employer are more motivated to work. Trust is everything'.

Direct-to-customer organisations - discernment success

If you sell from the high street in the UK, you'll already be experiencing challenges.

Pre-pandemic in 2019, the Office for National Statistics reported on changing consumer behaviour, significant shop closures and decreased footfall.

Physical shops have stiff competition from online retail that is convenient, easy, reliable, fast and cost-competitive.

However, there is now a growing trend in consumers wanting to purchase locally, whether that's at a national level, or from close-by independent brands. McKinsey's data also found that social media influence is waning and brand and product recommendations from family and friends are most impactful.

A PWC report on changing consumer behaviour for health care products explains that consumers expect transparent, objective and honest information about everything from ingredients and suppliers to company values and ethics.

Direct-to-customer checklist:

Use genuine deals and special offers for customers concerned over general rising prices.
Provide clarity on your status as an independent and local brand.
Tell the story of what your customers mean to you.
Publish information on quality - the durability, sustainability and value of your products.
Enable customers to share their reviews and engage in recommendation.
Less predictability from your customers means your business needs to stay attuned and keep relevant, with flexibility to iterate your offering.

Business-to-business organisation - discernment success

What are the building blocks of trust in a business-to-business relationship?

Different from direct-to-consumer, purchase decisions feature less emotion and loyalty and are likely to be structured, logical, longer-term, and involve stakeholder input.

According to a 2025 article in Psychology Today; competence, integrity and benevolence form the foundation of strong and lasting trust in business-to-business relationships.

These foundations are clearly aligned with values. All successful leaders will have a grasp on the meaning of competence when it's judged by your client or customer. What about the other foundations?

Integrity is established through honesty, transparency, and high ethical standards. It can also be identified by what it is not; manipulation, hidden motivation and agendas, and violation of norms professional, social or moral.

Benevolence is demonstrated through meaningful genuine concern and consideration for the interests of other parties, not only self-interest.

Business-to-business checklist:

Ensure your product technical data, case studies, and credibility evidence are available.
Measure competence and create a process for continual improvement.
Name your values and ethics and embed them into your decision-making and strategy.
Identify areas where transparency and honesty create conflict or challenges.
Negotiate with principles and integrity.

The Pernicious Impact of Scarcity

Within capitalism, scarcity acts as a fundamental driver in the supply-and-demand mechanism. The real or perceived limited availability creates value and allows for profit margins. Scarcity is most often understood by the consumer through advertising.

It's no surprise that the psychological manipulation of consumers clashes with ethical integrity. Why do businesses promote artificial scarcity?

In 1984, Dr Robert Caldini identified scarcity as one of the Six Primary Principles of Persuasion in his book 'Influence'. He made the case that people assign higher value to opportunities that are less available, striving to avoid losing out.

The human psychological driver of this loss aversion was researched by pioneering psychologists Daniel Kahneman and Amos Tversky, determining that our fear of losing out is a stronger motivator than the prospect of gaining something.

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The scarcity mindset - the persistent, often subconscious belief that there's never enough time, money, love or resources - has become highly pervasive in modern society. Driven not by poverty, but from our economic perspective of constant comparisons, consumer culture, and economic uncertainty.

In 2014, Scarcity Mindset Theory explored how the perception of scarcity consumes our mental cognitive resources, leading to a 'tunnelling' effect where people focus on immediate, urgent shortages while ignoring other information. This theory was proposed by prominent behavioural scientists Sendhil Mullainathan and Elder Shafir.

Human behaviours can be manipulated. Artificially created scarcity and increasing social comparison are well understood tools of exploitation. Sales and marketing teams prompt an impulse purchase over a rational choice when they use the fear of missing out to take advantage of our susceptibility to quicky acquire things we think are in limited supply. There's also reactance theory, where we value items more when our freedom to choose is threatened.

The scarcity idea is pervasive and applies not only to customers purchasing, but also to the organisations that are the producers and suppliers. Whilst creating a false sense of scarcity may result in some customers checking-out their basket, within our organisations it causes damage. The urgency and short-term vision blocks our way to broaden our view to our ethical, environmental and social responsibilities. Let's look at why this matters.

Within a business, the pernicious symptoms of scarcity include:

Hoarding of information and contacts for personal advantage.
Employees competing more than collaborating.
Zero-sum game where one person's success indicates another's failure.
Risk-aversion and cost-cutting motivated by fear.
Unnecessary tension in the internal allocation of resources.
Stress and urgency being used to justify unethical actions.
Decisions are short-term focused and questionable in hindsight.
Occasional disproportionately generous or selfish behaviours.

The Growing Attention to Ethics

If the list above isn't enough to discourage the use of artificial scarcity it's also worth looking at how trends in consumer behaviour conflict with its side-effects and the benefits of an abundance mindset.

High ethical standards can boost sales and consumer engagement.

The simple sales-message of benefits has shifted. Consumers are seeking resonance and value-alignement with their purchases and the organisations they support.

There's a need for transparency and sharing information on ethics, corporate social responsibility and sustainability. This is incompatible with the behaviours that arise from scarcity.

Shifting to Abundance

An abundance mindset fosters attention to growth, innovation, and collaboration. As a leader of an organisation with an abundance mindset, you consider that there are enough resources and opportunities from a focus on opportunity rather than limitations.

An organisation with an abundance mindset looks like:

Innovation, creativity and collaboration.
Disciplined approach to risk and finances to ensure realistic expectations.
Strategic alliances, strong relationships and shared success.
Good experience attracting and retaining talented team members.
Risk management is broad and considers more than short-term financial impact.
Long-term investments and projects.

While there's a general perception that Gen-Z are the demographic that desires brands aligned with ethical, environmental or social value, the data is more widespread.

Deloitte's recent Sustainable Consumer research indicated that 78% of consumers consider sustainability an important factor when choosing what to buy and 46% of consumers are actively opting for more sustainable products. Polling shows this is a growing trend and there's a high intolerance for 'greenwashing' where sustainability credentials are misleading.

An abundance mindset can be the key to better performance in your organisation and increased sales.

Be prepared to meet your consumer's desire for values in:

Environmental concerns - where your sourcing is sustainable, how you manage waste and resources, how you protect the environment.
Fair treatment of people - not just good conditions for your local employees, but think suppliers and in particular sweatshops and exploitation in the supply-chain.
Animal welfare and commitment to cruelty-free.
Relevant ethic-related independent certifications or audits.
Clear and honest communication.
Respect your customers, identify and publish your values - tax avoidance and unethical business practices matter.
Demonstrate social responsibility toward your community.
High-quality product and service along with shared value to create brand loyalty.