Not too long ago, discounts were not as common as they are today. I remember reliably knowing that I could buy a snowblower at a discount in the spring, and lawn equipment at a discount in the fall. Retailers priced their products based on their direct and indirect costs, plus a reasonable profit margin. They only offered discounts as clearance sales at the end of the season to offload unsold merchandise rather than store them until the following year.
That is not true anymore. Spawned out of the last recession, consumers have been conditioned to focus more on what they are spending than on what they are buying.
Retailers understand the consumer’s expectations for periodic discounts and have adjusted their pricing policies to offer more discounts throughout the season rather than at the end of the season only. Consumers are no longer content to wait for an end of season sale anymore.
Today retailers go into a season knowing that they will be offering discounts generally between 20% and 40%, yet even with these steep discounts, their sale price allows them to make them a profit. This means that the original sticker price of a product is priced well above what they expect a consumer to pay for it. They know that when they offer a discount it will be like chum in the water and consumers will turn into mindless zombies and buy, buy, buy.
By using price manipulation, retailers have created a rationalization to buy. Through the practice of discounting, buyers have been convinced to value the wrong thing – price alone.
Shoppers have been convinced to focus on what they are spending for an item and not on what they are buying. Consumers buy things today not because they need them, but because they were convinced that they can get it for a great price.
Moreover, consumers are less objective about their purchases when they feel they are getting a bargain. Customers are more apt to be happy with the discount they received and tell their friends about the awesome deal they got then to brag about the actual thing they bought.
Growing up if you asked someone about a recent purchase, they would describe every detail for the product. Today when I talk to my wife or my kids about a recent purchase, they share that they could not pass up the bargain. The often neglect to even describe the product they bought and only share that they got an awesome deal. In fact, my house is full of objects bought on discount that are still in their original box. Does this sound familiar? I know that I’m not alone in this.
Instead of valuing the underlining product, consumers today thrive on the thrill of the hunt. Consumers get a burst of adrenaline when they secure a great bargain.
Just like a junkie, the high soon fades and they are in need of another fix. Shopping has become a sport.
A bargain strikes an emotional chord that few other sales tactics do anymore. Buying something useful that makes your life more enjoyable and comfortable should be the goal of making a purchase. However, bargain pricing has robbed people for choosing products that they need or love in exchange for the feeling that the purchase gives them.
As a business owner, it is essential that you understand that the buying landscape has changed. Today buyers respond to discounts more than other tactics. Therefore as a business owner and seller, you will need to price your product or services high and offer everyone some kind of discount to tap into their emotional need to find a bargain.
Are you pricing your products and services so that you can offer buyers a discount, and tap into their emotional need for a bargain?
