If you’ve been looking for cheap office supplies online or discount stationery in your area, then by now you are 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 – specifically when you’re ordering in big amounts. Whomever your supplier is, you’re likely to achieve massive savings over high-street prices.
On the other hand, you can still wind up paying 2 to 3 times over the odds. A price reduction promotion or buy-one-get-one-free offer is really a warning signal, and almost certainly forms part of a pricing strategy that will look at you paying more for stationery and office supplies.
If you’re an economic director or office administrator, you might be clued in the big secret – but also for the rest individuals, here’s the one secret that’s going to wipe off just as much as half your business supplies expenses in one swift movement:
Stop trying to find discounted office supplies – It’s not really a call to arms over quality control – for a few situations, it may even be appropriate to get the budget option as opposed to the high-end one. Nor will it be about wastage and logistical planning, although proper cost analysis is an important component of controlling your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, basic principles of pricing. Even though there are complicated concepts at work, it boils down to simple human nature.
We’re hard-wired to go following the option using the big shiny ‘discount’ sticker on the front – even when it’s more costly. It’s a bizarre little quirk from the brain, then one that’s difficult to turn off – as US retailer JC Penney discovered for their ongoing regret.
Back in 2012, the supermarket giant announced they were putting a conclusion to their promotional pricing strategy, which saw everyday staples at a permanent discount. Like most supermarkets, JC Penney was artificially inflating their shelf prices before offering them an arbitrary discount. Occasionally, a 50% discount was actually a 10% increase on the recommended retail price.
The incoming CEO Ron Johnson announced a shift to a different, ‘honest’ system of pricing with no fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or any other shifty tactics. The brand new system was intended not just to lower prices, but to aid consumers make informed decisions about their groceries and budgets. The reality that Honourable Ron became Jobless Johnson within less than a year probably lets you know how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a feeling of anger over the things they regarded as a betrayal; revenue and share price went into freefall; as well as the company quickly returned with their previous strategy of artificial markdowns. When offered the same products having a lower pricetag, customers still preferred to pay the larger price – as long because it experienced a discount sticker onto it.
In fact, JC Penney customers were so offended by the disastrous strategy that brand loyalty not just went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The company actually issued an apology to jilted shoppers, but the customer base stayed away until prices were raised – sometimes greater than they originally were. An industry commentator had this to express:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it has discovered is the fact that prices of certain items-designer furniture, particularly-have risen by 60% or even 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 as much as $245.”
Discount pricing strategies are basically par for the course on the high-street – and, since the BBC uncovered, a lot of them are as arbitrary and misleading as JC Penney’s. And, in most cases, they can make sense from a B2C perspective. The Chartered Institute of promoting claims that attention spans are limited to 8 seconds, rather than the 12 seconds that they were in early 2000s.
We live within the information age: a arena of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers need to make decisions quickly according to limited information. Discounting is definitely an immediate recognisable signal that a wise purchasing decision has been made, (whether true or otherwise not).
* For somebody involved with B2B procurement, however, discount pricing needs to be public enemy number 1.
* Unfortunately, every workplace out of your local chip shop to the state of New York has at one time or some other fallen victim for the same ruses that function in the supermarket.
* Promotional pricing strategies in the office
* It’s often said disparagingly of politicians which they don’t know the cost of a pint of milk, (or even in the case of the mayor of New York, the buying price of a pen and paper).
In every honesty, however, none people do. Milk, bread, and other staples are generally far cheaper than they must be – for numerous reasons:
They could be used as 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 other items as an element of an up-sell; sandwich-drink-and-snack deals at lunchtime are a wonderful example, but there are invisible examples like coffee strainers and coffee (or ink and printers).
They might be used to build trust or complacency within the shopper, who can often judge all of the prices of the retailer based on the first or most common things that they purchase from them.
They could use tricks of human perception – like charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 and so forth); or even just including information that appears relevant but isn’t. A thing that is advertised as “Only £1.99 whenever you buy 2!” may look like a reduction, however, if the single unit costs £0.99 then it’s actually more costly.
All the tricks outlined above, employed for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that for yourself with just a short while of searching – or checking your latest receipt.
In day-to-day life there’s not much we can do relating to this kind of obfuscation. Very few individuals have the time, resources or inclination to investigate and compare grocery prices on an item-by-item level – and the opportunity costs of rushing from supermarket to supermarket in the quest for the most affordable potatoes by gross weight in reality probably reeydf the benefits. That’s why JC Penney’s consumers are slowly returning since the costs are rising.
A company facing similar purchasing options, however, has the advantage of a monetary director to protect its decision-making process.
There’s still scope, even or possibly especially in age information, to possess someone on staff who can perform considered, researched procurement. Somebody that can take time to perform a proper cost analysis; participate in slow thinking; and are available to a conclusion according to facts rather than on sound and fury.
While honesty didn’t work out so well for Ron Johnson, we at CP Office still feel that it’s both worthwhile and worth a try. So, unlike many other stationers and vendors of office supplies, we prefer to offer an impartial cost analysis to our potential customers, as well as the advantage of our genuinely huge discounts. With CP Office, there’s no fuss and no tricks – just an honest discussion about what’s best for you along with your office.