Thursday, February 2, 2017

Encourage Prompt Use of Discounted Items

The interval between purchase and use of items your customers buy at a substantial discount influences their interest in purchasing from you again. Getting a price break pleases people, and pleasure usually translates to wanting to patronize that retailer again. But paying the lower price also reduces a need to justify the purchase and therefore firmly remember there was a substantial discount. This diminishes the impact of the discount on motivation to buy again.
     In studies at Columbia University and University of Toronto, participants with a sweet tooth were given sufficient money to purchase chocolate truffles at either the regular price of one dollar each or a 50%-off price of fifty cents. Some of the people were asked to eat the chocolate right after purchase, while the others were asked to wait a week before consumption.
     Among those purchasing the discounted items, the people who had to wait rated the transaction as less satisfactory. The researchers found the same pattern with purchases of other merchandise types such as orange juice and with purchase of experiential items such as music selections.
     This doesn’t necessarily mean people experience no pleasure from waiting. Researchers at University of California-San Diego and Duke University discovered that although people say they would never pay more money if it meant waiting longer for delivery, those same people report experiencing substantial pleasure from anticipation during the wait. And with items for which there is no discount at purchase, the wait can add noticeably to the consumption pleasure. Psychologists at University of Chicago found that with products like theatre tickets and premium chocolate candies, the average purchaser obtained more total enjoyment if there was a delay before use. Savoring feels good.
     An important function of retailer’s discounts is to create a positive price image among potential customers. Studies at Erasmus University Rotterdam found that the pricing of a certain class of items was especially influential in shaping the price image. Among these “lighthouse items,” the researchers said, are those usually bought in large quantities and then stored, and for which consumers believe higher product or service quality requires a higher regular price.
     But with stored items, consumption is delayed, so the power of the discount is lessened. The remedy is for the retailer to encourage purchasers to promptly use as least some of these lighthouse items, along with promptly at least sampling other items purchased at substantial discounts.

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

Click below for more: 
Sense When Wait Irritation Heats Up
Discount Lighthouse Items for Low Price Image
Delay Assumptions About Fast Shipping
Think Through Layaway Implications

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