AboutJames E. Dion Expertise Most questions about trends in specialty retail, how customers are changing both in the US and Europe. Demographics for all countries as they relate to retail trends and issues. Store Operations, Buying and Merchandising.
Experience
Past/Present clients Microsoft, Harley-Davidson, Ritz-Carlton, Hummer, Ace Hardware, Coleman Spas, Aldo, Intel, Dell, Safeway, New Balance, IBM, Kodak, Bata International, Nortel Networks, Honey Baked Ham Co., Man Alive, Highsmith
B.S Chicago State University
M.S. Chicago State University
PhD (abd) Illinois Institute of Technology
I have noticed over the last several years that a trend has developed with some of the large national retailers. They seem to start with a highly inflated MSRP and the item is perpetually on sale. MSRP $50.00 Sale 40% off - (Retailer still maintains high margins) - I am sure the consumer realizes the product was never worth $50, in most cases not even half of that, but the idea of a 40% discount still seems to compel them to buy. The perceived value is completely manipulated. I always felt this was somewhat deceptive. Am I loosing out by not following in this practice?
Thanks!
Answer Adam,
Yes, unfortunately you are right with your observation and some customers continue to fall for this artificial savings on the arbitrary percentage off a fictitious regular retail price. But, some customers are catching on and looking at the net price. This is especially true of branded products where the customer can comparison shop lowest price. As to whether you are loosing out by not deceiving your customers can only be answered by you, would you enjoy deceiving your customers? Would they appreciate it if they found out? I think not. Honesty and trust take years to establish with a customer and seconds to shatter. Tell your customers the truth, that you do not discount honesty and integrity. Stay the course.
