Itâ€™s a favorite word with most shoppers: â€˜SALEâ€™. There is something about a discount tag that makes a dinner set or a skirt which one wouldnâ€™t have given a second look irresistible.
Many a times customers might have picked up a spatula or a trouser at oh wow! —50% discount? Chances are the plastic spatula would be of no use and the trouser would occupy space in wardrobe with its price tag intact. Turns out, the worldâ€™s biggest spenders are those who buy at a sale.
There are not many people who just see a â€˜saleâ€™ sign and walk past. Customers just have to go in and feel very proud when they get good bargains. Sometimes, when a trouser is really cheap and of good quality, one just buys it. There have been many occasions when the trouser is a size smaller but the chances are the customers decide to buy assuming they will lose weight at the spur of that moment.
Clearly, a sale is no miserâ€™s delight rather, itâ€™s a spender dream. This is a global phenomenon. Recently, Oprah Winfrey got some financial experts help three families heavily indebt who were featured on her show. The women were asked to go on a â€œspending dietâ€? and the first thing ticked off from their list of activities was buying in sale, no matter how tempting the offer. The thrill of getting a deal in shopping, it appears, takes over the rationale of buying what you need.
Itâ€™s a form of heuristic behavior, as described by Nobel Prize winning psychologist Daniel Kahneman.
One of the heuristics is how our rational thinking comes to a stop the moment we see a â€˜saleâ€™ sign. The mind takes a short cut in decision-making; it doesnâ€™t want to go into elaborate analysis. Thatâ€™s why you will always notice sale in reverse print in thick bold fonts.
The adman points out that another heuristic is when a shopper sees a notice that says â€œfor limited periodâ€? or â€œtill stocks lastâ€™. The created scarcity apparently generates a fear of losing out among many shoppers. Perhaps, this is the reason why the shopper ends up buying three times more than what is planned.
The Big Bazaar sale in India in different cities on January 26 brought home the point effectively. The discount offered was up to 50% in every category from teaspoon to television. The supermarket which sees 100,000 visitors every day saw 2,000,000 walk-ins that day. The situation went out of hand and the police were called in to handle the situation. Big Bazaar had to extend their â€˜cheapest sale of the yearâ€™ for three days.
President and CEO, Food Bazaar said that they were surprised at the way people jostled to buy furniture and electronics items like television, which are normally bought after a lot of planning and decision-making. They did three-and-a-half times more business compared to other days.
On an average, a two-week sale in a store fetches nearly four percent of the annual sales turnover of the company. Shops usually go on sale, twice a yearâ€”once in February and then just before the festive seasonsâ€”to clear the old stuff and stock the new collection for festive buyers.
So while the shoppers are ecstatic over getting a bargain, retailers laugh their way to the bank. Itâ€™s established that shoppers buy three times more than they would have ordinarily bought without sale. Sometimes they go berserk and pick up four salwar kameez (an Indian dress) in different colors, just because itâ€™s coming cheap. For a Rs. 90,000 crore industry, these impulses translate into a lot of money.
Itâ€™s the greed and fear, intrinsic in the buyer that the retailers take advantage of. Big Bazaarâ€™s PRO elaborates: â€œGreed for getting a good bargain and fear of losing out. A smart shopper is considered very intelligent, one who always gets the best deal.â€?