Wednesday, December 21, 2011

Discount illusions drive retailers, shoppers

The 20 percent solution fits the business case for retailers this season.

Owners of sport shops, housewares emporiums and jewelry merchants seem to have settled on 20 percent as the magic discount number for golf clubs, Crock pots and diamond bracelets.

If there's a newspaper coupon or internet deal involved, it seems that you are getting a 20 percent haircut courtesy of your local store. But, are you really?

It's taken to an extreme at an outfit called Bed, Bath and Beyond. Shoppers roll into my local outlet clutching fistfulls of their 20 percent coupons like wedding bouquets. And, even when presented with coupons with expiration dates from the Bush administration, clerks dutifully scan the bar code for the 20 percent bonus for their grateful customers.

No doubt the bar code tells them who's shopping from what address -- and gives them the marketing muscle and targeting to send even more of those oversized blue coupons. The illusion of discount is perpetuated -- even if the final transaction prices is more-or-less in line with their competitor's prices.

I love the store and its selections. But only a rookie should be caught in their paying the BB&B retail -- without 20-percent-off coupons.

1 comment:

  1. Don, It's a fact. People are hooked on coupons. Macy's tried two years ago to reduce their mailed coupons to credit card customers, and the tactic failed miserabily in lost sales. If consumers imagine they are getting a deal, even if we up the price in the meantime, then they are (stupidly and unwaringly)happy.

    - Joseph Lawrence
    PR expert and retail industry analyst

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