Everybody loves a sale… except the store owner. My retail team and I found a way to still please the sales rack shopper while not taking a huge hit on the books.
We named our recent retail psychology experiment, “the price-point shoppers”. Prior to our experiment, we had everything on the sales rack marked 50% off. Of course, people would purchase everything at 50% off. So I tried to mark everything 30% off and customers would say, “I’ll just wait until it goes 50% off”. I learned quickly that there was no point in marking things 30% off and I had to find a way to change the customers’ thinking. This was what triggered the experiment.
We spent two days retagging the sales merchandise with the original price and then price-pointed these items. We marked items strategically by calculating 30%, 40% and 50% off. Instead of writing the actual percent discount, we actually wrote a new dollar amount on the tag.
The results of our experiment proved valid. People would see the original price and then see the new discounted price and think it was a great deal even though it was only 30% off. Our results show that most people don’t calculate the amount. Their eye just sees a dollar amount and that registers a great deal. The notion of 30% off is clearly not a good deal but a $120 dress for $84 seems like a steal.
So retailers, next time you mark items on sale, try my new tactic. It is awesome. The customer is happy and your books are happy.
