40% off! 50% off! Prices so low, we’re losing money on every sale!
Discounts just aren’t as special as they used to be and this time of year they’re the norm not the exception. Retailers both online and off are slashing prices or offering large discounts in hopes of getting holiday buyers to fork over just a little bit more cash. That’s right – they’re charging less and hoping to get more.
Insane? Not really. It’s all just a mind game, after all.
According to a survey by UK marketing expert David Rawlings, 70% of US shoppers believe that holiday discounts are fake.
Older, more affluent shoppers and those who live in the Northeast are even more likely to believe that retailers are lying about discounts.
I’ve often had this thought when my local grocer runs a 50% off beef sale. I swear they mark the meat up so that the 50% just brings it down to the normal price. But people buy and buy because. . . hey. . .it’s 50% off. I know that it’s better to wait for the actual per pound price to go down. It’s not as dramatic sounding but it’s a better deal.
Rawlings warns that jumping on the pre-Christmas sale bandwagon might result in short-term success but could alienate your long term customers. If your regular shoppers (the ones who know your prices) believe they’re being deceived, they’re not likely to come back after Christmas when you really need them.
To get around this, you could offer bonuses instead of discounts such as free shipping. Shipping on heavy items can really add up but it’s also annoying to pay a flat $7.00 shipping charge on a $3.00 item. Instead of giving me a discount on the item, I’d rather have my shipping comped.
Or, you could give me a free item to go with my purchase in lieu of a deep discount. Free scarf with sweater purchase. Free tea with mug purchase. Now I really feel like I’m getting a deal.
There’s another potential problem with holiday discounts and loyal buyers – I call it the ‘if I’d known syndrome.’ I tend to shop early only to find discounts on the same items two weeks later. If I’d known my favorite retailer was going to offer 50% off, I would have waited. This is no big deal for the one-time, buy and run shopper, but you need to take care of your non-seasonal, regular buyer.
Trust is a huge reason why a shopper returns to a specific store. They trust that they’ll get a quality item at a reasonable price. The trust the customer service and that there will be a quick solution if a problem pops up. Retailers have to do all they can to maintain that trust throughout the holiday season.
Yes, I know it’s easy to get caught up in the hoopla and hype just remember which customers will still be with you when the 50% off sign is gone.