If you’ve been trying to find Cheapest School Supplies or discount stationery in your town, then right now you’re probably feeling like you’ve stumbled onto the set of Carry On At The Circus. It’s difficult to get a read on what’s a suitable price to pay for pens, paper, printer ink or biscuits – particularly when you’re ordering in large quantities. Whomever your supplier is, you’re very likely to achieve massive savings over high-street prices.
On the other hand, it is possible to still find yourself paying two to three times within the odds. A reduction promotion or buy-one-get-one-free offer is actually a warning signal, and almost certainly forms element of a pricing strategy that can look at you paying more for stationery and office supplies.
If you’re an economic director or office administrator, you could be clued in to the big secret – but throughout us, here’s the one secret that’s likely to wipe off around half your office supplies expenses in just one swift movement:
Stop looking for discounted office supplies
It’s not just a call to arms over quality control – for some situations, it may be also appropriate to go for your budget option as opposed to the high-end one. Nor will it be about wastage and logistical planning, although proper cost analysis is a crucial element of managing your office budget. Rather, it’s a matter of Bayesian signalling; Gricean logic; and, ultimately, basic principles of pricing. Though there are complicated concepts at the job, it boils down to simple human nature.
We’re hard-wired to visit following the option with the big shiny ‘discount’ sticker on the front – even though it’s higher priced. It’s a bizarre little quirk in the brain, and one that’s challenging to shut down – as US retailer JC Penney discovered with their ongoing regret.
Way back in 2012, the supermarket giant announced they were putting a stop with their promotional pricing strategy, which saw everyday staples with a permanent discount. Similar to most supermarkets, JC Penney was artificially inflating their shelf prices before offering them an arbitrary discount. At times, a 50% discount was really a 10% increase on the recommended retail price.
The incoming CEO Ron Johnson announced a shift to an alternative, ‘honest’ system of pricing with no fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or other shifty tactics. The newest system was intended not only to less expensive costs, but to help consumers make informed decisions with regards to their groceries and budgets. The truth that Honourable Ron became Jobless Johnson within less than a year probably tells you how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a sense of anger over the things they perceived as a betrayal; revenue and share price went into freefall; and also the company quickly returned for their previous technique of artificial markdowns. When offered the identical products with a lower pricetag, customers still preferred to pay for the greater price – provided that it experienced a discount sticker on it.
Actually, JC Penney customers were so offended by the disastrous strategy that brand loyalty not merely went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The sgzvks actually issued an apology to jilted shoppers, however the customer base stayed away until prices were raised – sometimes more than they originally were. A niche commentator had this to say:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. Exactly what it has discovered would be that the prices of certain items-designer furniture, particularly-have risen by 60% or maybe more at JC Penney almost overnight. 1 week, a side table was listed at $150; a few days later, the “everyday” price for the very same item was approximately $245.”
Discount pricing strategies are basically par for your course on the high-street – and, because the BBC uncovered, most of them are as arbitrary and misleading as JC Penney’s. And, typically, they create sense from the B2C perspective. The Chartered Institute of Marketing claims that attention spans are limited to 8 seconds, rather than the 12 seconds they were during the early 2000s.
We live in the details age: a realm of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers want to make decisions quickly based on limited information. Discounting is definitely an immediate recognisable signal that the wise purchasing decision will be made, (whether true or otherwise).
For a person associated with B2B procurement, however, discount pricing should be public enemy number 1. Unfortunately, every workplace from the local chip shop to the state New York City has at one time or some other fallen victim for the same ruses that function in the supermarket.
Promotional pricing strategies in the workplace. It’s often said disparagingly of politicians they don’t know the buying price of a pint of milk, (or when it comes to the mayor of New York, the cost of a pen and paper). In every honesty, however, none of us do.
Milk, bread, as well as other staples are usually far less expensive than they must be – for any number of reasons:
They might be used being a loss leader, to draw in customers who’ll then pay more for other things.
They might be inferior-quality versions employed to undercut competitors.
They could be bundled with some other items included in an up-sell; sandwich-drink-and-snack deals at lunchtime are a good example, but there are invisible examples like coffee strainers and coffee (or printer and printers).
They could be employed to build trust or complacency within the shopper, that will often judge each of the prices of any retailer based on the first or most common items which they buy from them.
They might use tricks of human perception – such as charm pricing (like.9 or.7); pricing under benchmarks (such as £1, £5, £10 and so forth); or perhaps just including information that appears relevant but isn’t. Something which is advertised as “Only £1.99 when you buy 2!” may seem like a reduction, however, if the single unit costs £0.99 then it’s actually higher priced.
All of the tricks outlined above, utilized for milk and bread, apply equally well to equivalent office basics like pens and paper. You are able to verify that on your own with just a couple minutes of searching – or checking your most recent receipt.
In everyday life there’s very little we are able to do about this sort of obfuscation. Not many people have enough time, resources or inclination to investigate and compare grocery prices on an item-by-item level – and also the opportunity costs of rushing from supermarket to supermarket in the search for the cheapest potatoes by gross weight actually probably outweigh the rewards. That’s why JC Penney’s clients are slowly returning because the costs are rising.
A company facing similar purchasing options, however, has the advantage of an economic director to protect its decision-making process.
There’s still scope, even or possibly particularly in age of information, to get someone on staff who can perform considered, researched procurement. Somebody who can take the time to perform a proper cost analysis; take part in slow thinking; and are available to some conclusion according to facts rather than on sound and fury.
While honesty didn’t work out very well for Ron Johnson, we at CP Office still believe that it’s both worthwhile and worth a go. So, unlike various other stationers and vendors of Buying In Bulk, we prefer to present an impartial cost analysis to the potential customers, in addition to the advantage of our genuinely huge discounts. With CP Office, there’s no fuss without any tricks – just a sincere discussion about what’s right for you along with your office.