I was wondering the other day when a great deal is really a deal? Is it only when it’s on sale, or when it’s priced right, even without a so-called sale? How conditioned are we that it’s only a deal if it’s advertised at 25, 30 or 40% off?
What got me thinking was trying to buy a TV for my brother at Future Shop. Tuesday two weeks ago, the one I wanted was $319 – I just didn’t have the room in my car. Two days later, when I was a buyer, it was in the flyer and $20 higher! It was now an advertised deal, but at a higher price. When I asked the salesman what the story was, the response he gave me was that “that happens all the time.” There was more to his explanation, but I had already stopped listening.
Chevy in the U.S. has now started something called Total Confidence Pricing. It’s another attempt to get away from rebates and temporary sales such as employee pricing, clearance, or the likes. In Canada GM has tried that two or three times in the last decade or so. How successful will they be this time around when other manufacturers advertise so-called sales? Saturn was based on that concept and never did get much market share with their one price and no haggling and…well, they’re gone.
The giant retailer JC Penny, roughly equivalent to our Bay, last year went to something called everyday value pricing. No more screaming deals for the day or the weekend. They are trying to emulate WalMart-type pricing. As of now, it’s a total failure. Sales were down 19% in the last year and another 21% in the last quarter which just ended. For a retail giant, that’s staggering and frightening. Honest and fair pricing all week and all month isn’t working. Their new CEO is from Apple, but I’m not sure he can turn around a 102 year old company.
We’re not that interested in fair pricing it seems. While the deals at JC Penny, Saturn, and maybe Chevy were fair and good, we want the SALE sign screaming at us. We’re suckers for a sale. As long as it says 40% off, or has a $2,000 rebate, we’re all excited and pull out our credit card, or want to know where we can sign up for the financing. We don’t really know if that’s now a good deal or not, but that sign sure makes us buy.