Well, the grocery stores with “club cards” do this with just about everything they sell, because they always sell everything at the “club card” price. If someone doesn’t have a “club card,” the cashier just pulls one out that he or she has on hand to scan for the customer. Then, on the receipt, it tells you how much you saved by paying the same price that everyone else pays, all the time.
Shops over here use the same tactics but they have to be careful to get round the law that says that goods have to be offered for sale at the full price before they can be discounted.
My wife bought a new handbag from a discount store in our local shopping centre. The label says that the original price was £99.99 but it was then reduced by 70% to £29.99. The shop had big notices offering a "further 20% off everything, so we actually paid £24.99 for a bag that was probably worth £25.00. I asked the shop assistant whether they had ever sold any at £99.99 and she laughed. “They will have been on sale at one of our shops at that price,” she said.
At the back of the shop, not well displayed, were a number of bags and cases at silly prices. These would have undoubtedly been on sale elsewhere heavily discounted.
Supermarkets have coupons, discounts BOGOF, buy two get one free, and points to make us think that we are getting a bargain. There are some goods that no one but the wealthy would even consider paying the full price for: Furniture is always in a sale that end on Sunday. Tyres are always 30% off or more (but they add on charges for valves, balancing and disposal of the old case). Interestingly, the supermarket I use has changed its policy on wine recently. I used to buy a particular brand that we like when it was on sale at £5.00 - I would buy four or five cases. When it was not discounted it was priced at £6.50 or even more. Now they have reduced the standard price to £5.00 and it is never discounted (although some other brands are).
In the UK we are losing our dislike of haggling. Financial gurus on TV and radio exhort us to haggle over our mobile phone charges, our cable and broadband, and even in department stores where apparently the assistants sometimes have some leeway on price.
Everyone loves a bargain, so marketing experts set about fooling us into believing that we are getting one.
Customers love getting something off the price - even if its just fictional and in most cases it’s fictional and will spend more if they think its a bargain or buy the item without much thinking.
That doesn’t mean, that you can’t get a bargain - but for that to happen, you need to know the price for that item and want that specific item at that specific time.
And, needless to say (but I’ll say it anyway), the item you want in the specific size/color/style you want must not have sold out before you get around to buying it.
Not to belabor this, but I have never ever seen jewelry offered at Macy’s that was not designated as being on sale.
I’ve had people tell me it’s the reason they won’t buy a Toyota or Honda. They’re so used to getting these exaggerated discounts off of inflated sticker prices on Fords and Chevys that when they go to a Toyota dealer and the salesman won’t give them the huge discount they say “I went to a Toyota dealer but they were all jerks and weren’t willing to give me a deal!”
Two beggars are sitting side by side on the street in Rome. One has a cross in front of him, the other a Star of David. Many people go by, but only put money into the hat of the beggar sitting behind the cross.
A priest comes by, stops and watches throngs of people giving money to the beggar sitting behind the cross, but none give to the beggar sitting behind the Star of David. Finally, the priest goes over to the beggar behind the Star of David and says: “Don’t you understand? This is a Catholic country. People aren’t going to give you money if you sit there with a Star of David in front of you, especially if you’re sitting beside a beggar who has a cross. In fact, they would probably give to him just out of spite!”
The beggar behind the Star of David listened to the priest, turned to the other beggar with the cross and said: “Moshe, look who’s trying to teach the Goldstein brothers about marketing!”
Because a particular type of consumer is enticed to buy more stuff that way. J.C. Penney’s tried to get away from sales and coupons and instead go to “low everyday prices”. It bit them in the ass and they went back to sales and coupons.
My first real job was working at Toys R Us in the mid-late 90s. They had coupons and clearance deals but never had sales, something my store director was very proud of. My last year working there, they introduced TPRs or “temporary price reductions” of items. My director insisted they weren’t sales but to this day I have no idea how they weren’t.
I think those marketing tactics are pretty successful in any retail environment no matter how much of a benefit the consumer actually gets. And most retailers are going to resort to them eventually if they want to stay competitive.
It’s the difference between when you really really want something and would pay nearly any price for it, and when you’d pay a certain amount for some item, but not more than that. Retailers want to get the few people who absolutely need a certain item to pay the exaggerated “regular price”, but realize that they will need to lower prices periodically if they actually want to sell a reasonable amount of product. There are some products that absolutely never go on sale and that you will never get deals for (I’m told Corvettes are in this category) because the items are in such demand at the regular price that there’s no need to cut deals on them. You never really hear about such items precisely because there’s no need to advertise for them; you only hear a lot about the items that everyone is trying to get you to buy that you aren’t already inclined to.
I used to work at a Trader Joe’s, and one time a customer asked me about a club card or a membership card. I told her the truth, which is that we don’t have them, we have low prices for everyone, as much as possible (if you compare the quality you get from many Trader Joe’s products this is true, but I stay away from the breads as they go moldy very fast, to prove I am not a shill).
Her response was to get a hostile look on her face and say “Well that SUCKS!”
It’s bizarre, she didn’t hear the low price part of what I said, she wouldn’t “believe” the price she was getting was the lowest possible price unless there were coupons or cards involved.
Well there is a three-week period in the fall and a three-week period in the early summer. Other times for select items. But in general, you have to work pretty hard to hit it when it’s not at least 20% off on the precious stones and 40% on the semi-precious.
We had a court case here 20 y ago or so, and the Carpet Sales company won the right to claim their stuff was “50% off” or whatever, because there is no defined original price: it could be whatever. So it’s pretty open here.
Also, one small clothing company I know here went bust trying to set an honest price (they had a closed-group clientel, so there was a reason for their madness), because in their market they were competing with stores who made most of their sales at “20% off” or “25% off”
The last time I was in a JC Penneys (as in the last time I’ll ever shop there) the cashier wanted me to get their charge card, entitling me to some % instant savings, which I declined. She just wouldn’t. let. it. go.
She hammered away at me about how I’d be a fool to not take the deal. I patiently explained that I just wanted to pay for the damned clothes and go. If she were just offering cash to me for filling out the application, I’d say no thanks as well.
I eventually got out of there, but I swore I’d never go back. But I had to return later that day to get a theft deterrent thing removed, which the cashier missed due to her exuberance about my potential savings. Never again, Penneys!
Speaking of JCPenney’s, when they tried to just give a fair price and not do this sale stuff (They even got rid of the +$0.99 stuff.) it completely backfired. Without the constant sales and the advertising that went with it, people stopped buying things.
I recently watched an Extra Credits episode about it.
I work for an industrial distributor and we advertise online and you will often see a motor priced as List Price = $750.00 - Sale Price = $615.00 or something like that and it’s all true. The caveat being that no authorized distributor sells for list price and the “Sale Price” is simply the price we sell for, not some sort of temporary special reduction.
In our industry, one reason for the high list prices is that manufacturers can publish them once and then simply change dealer discounts over time. I have some products that haven’t changed list prices in 10 years, but the dealer discounts shrink a little every year.