Psychologists can argue until they are blue in the face about the appeal of Veblen Goods or that value can be demonstrated by price point, but veteran retailers know that everyone likes a good deal.
Rich or poor, young or old, oligarch or peasant, the shopkeeper knows the mind of the buyer requires we feel like we are getting more than we paid. This has some downstream consequences.
Retailers try to avoid degrading their price points and brand reputation with tactics like percentage off sales. And they can be clever about it. There are seemingly innumerable shopping holidays now where you can play with merchandising, special collections, loot boxes and creative value presentation.
Black Friday, Cyber Monday, Single’s Day, Christmas in July, Prime Day, Fukubukuro (福袋) Lucky Bags, and Lunar New Years are just some of “tentpole” shopping holidays around the world that provide merchandising opportunities and encourage taking a look at what is on offer.
Yet somehow the middle market of mass retailing is still struggling with how to manage sales. If you train your customers to expect a deal, and worse if they expect it at a regular time and frequency, what will make them shop in between those opportunities? Mall brands regularly get trapped by sale training behaviors
I’ve been watching Sephora go from a twice a year sale brand to trying their hand at daily drops. It seems as if they are going the Ulta route in the hopes of driving more purchasing at lower price points. Drive repeat purchasing at higher frequency and it might work.
However the average order volume has to be going down. I wonder if they have no choice having re-oriented the brand down market to attract younger buyers during the Sephora Teen pandemic era. But we are no longer in stimulus spend era and I imagine this is alienating to their older upper market customers. I’ll be watching it.