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In grade school, I had a teacher who taught us a little math and a little bit of business at the same time. There was a cupcake fundraiser and she suggested a sign saying that one cupcake would sell for 50 cents, but if you buy 3 you only pay $1.50!! Sure, you won’t fall for this as an adult, but some of our fellow school mates hadn’t mastered their math skills yet!
Marketers spend hours trying to devise ways to get consumers to open their wallets. It is their job and they are pretty good at it. They are paid to research and find ways to get people to spend.
In 2012, J.C. Penney’s told shoppers that they were getting rid of sales and promoted everyday low prices. They called it “fair and square prices.” I actually enjoyed their commercials making fun of retailers for having door busting sales that end at a certain time. They made fun of stores for pricing things at $X.99 so shoppers will perceive them to be cheaper. Check out a few of their ads.
Instead of door busting sales that end at a certain time, why not great prices all the time. They also promoted “no games, just fair prices.” The campaign made sense to me. I didn’t shop there, but I don’t really shop generally.
Well J.C. Penny’s ad campaign promoting fair prices flopped. I have no idea whether their prices were actually fair and square, but I don’t think that was the reason their marketing campaign failed. I think the reason it failed was because people like sales and coupons. People want to think they are getting big savings (whether or not they actually are getting those savings). Shoppers armed with coupons think they are getting a better deal than the shoppers without them. Shoppers who get to the store early for the “door busting” deals think they are getting a better deal because they woke up early and got to the store earlier than shoppers who were either too lazy or didn’t know about the time restriction. All bargain hunters want to boast to their friends that they got a steal of a deal by using a coupon or getting a great find at the clearance rack. No one really boasts of getting an everyday low price.
So what other methods do stores use to “trick” shoppers into thinking that they are getting a good deal?
Markdowns:
You’ve seen it. 30% off! Then the 30% is crossed off and it now says 40% off!! Wow, an even better deal right? Well stores often markup their prices right before sales to make it seem like there was a markdown. Actually, back in June, J.C. Penney’s was caught marking up prices only to “mark it down” later. Well shoppers didn’t like their everyday low prices and “fair and square” prices so what did you expect? On ABC’s “The Lookout,” the investigative reporters booked a travel deal to the Dominican Republic which advertised a 44% discount, but they found that it was cheaper booking directly from the hotel. Groupon has some good deals sometimes, but make sure they are actually good deals before buying.
Only a few discounted items available:
You know this trick. This is a favorite of retail stores during Black Friday sales. They advertise deeply discounted prices on popular items, but only have a few in stock. What happens? We get shoppers waiting in line before they’ve finished eating their Turkey on Thanksgiving.
Buy one get one free:
But what if you don’t need that many of the product? Well, many people will just buy more since they’re getting one free and assume they’ll find a way to use it. Plus, often times they’ll mark up the price of the item you are paying for when giving one for free.
Are you easily fooled by tricks that stores use to lure you in to get you to buy? What other ways do stores use to get shoppers to buy their stuff?