Dread the Dead, Sell It First

With Expiration Date Based Pricing (EDBP), the retailer lowers the price of items as the expiration date approaches. The thought is that it’s better to sell the item at a reduced profit than not to be able to sell it at all.
     Researchers at University of Miami, University of Leeds, Athens University of Economics and Business, and ALBA Graduate Business School analyzed EDBP among grocery retailers. However, the practice is not limited to that sector. At the time of Sy Syms's death, his company was operating thirty stores in which, stamped on the back of each price ticket, was the date the item was placed on the sales floor, and stamped on the front was a series of dollar amounts in descending order. Every ten selling days, the price moved to the next lower amount on the ticket. Fashion, too, is perishable.
     Research findings from that tri-national group plus other research on the practice suggests the following about EDBP:

• If your customers are accustomed to your using EDBP throughout your store and you stop using it, this won’t markedly change customers’ perceptions of the quality of merchandise you carry. 
• If your store starts using EDBP throughout, shoppers loyal to the store will begin to consider the store to now have somewhat lower-quality merchandise. 
• This problem can be eased by building trust, such as by having a liberal return policy. Encourage purchasers to return for exchange any unused product that goes beyond its expiration date, even if purchased with the EDBP discount. Researchers at Baruch College find that after someone acquires a product and works through any initial regrets, they hesitate discarding the product past the expiration date. As a result, they’ll use an inferior product, becoming less likely to purchase the item and brand from you in the future. 
• If EDBP is featured as a socially responsible practice to reduce waste, its use can even generate positive consumer evaluations. However, your customers who take home a product with a date on it can easily be confused as to what the date indicates. “Expiration date” means the last date a food should be eaten or used. But your customers might also encounter “sell by,” “best if used by,” “guaranteed fresh until,” the often cryptically-formatted “pack date,” and the “born on” seen on beer bottles. Confusion can irritate customers. Prepare your staff to answer questions about what these expiration and freshness dates mean. 

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Purge Expired Products 
Make Your Shoppers Feel Smart