If you’ve been looking for low priced office supplies online or discount stationery in the area, then right now you are probably feeling like you’ve stumbled onto the set of Continue At The Circus. It’s hard to get a read on what’s the right price to cover pens, paper, printer ink or biscuits – particularly when you’re ordering in bulk. Whomever your dealer is, you’re likely to achieve massive savings over high-street prices.
On the other hand, it is possible to still wind up paying 2-3 times on the odds. A discount promotion or buy-one-get-one-free offer is actually a warning signal, and almost certainly forms element of a pricing strategy that will view you paying more for stationery and office supplies.
If you’re an economic director or office administrator, you could be clued into the big secret – but for the remainder of us, here’s the one secret that’s going to wipe off as much as half your business supplies expenses in just one swift movement:
Stop looking for Buy School Supplies Online
It’s not just a call to arms over quality control – for a few situations, it may be appropriate to choose your budget option instead of the high-end one. Nor will it be about wastage and logistical planning, although proper cost analysis is a vital element of managing your office budget. Rather, it’s a question of Bayesian signalling; Gricean logic; and, ultimately, basic principles of pricing. Though there are complicated concepts at work, it depends upon simple human nature.
We’re hard-wired to travel right after the option with all the big shiny ‘discount’ sticker on the front – even if it’s more expensive. It’s a bizarre little quirk in the human brain, then one that’s difficult to turn off – as US retailer JC Penney discovered to their ongoing regret.
Back in 2012, the supermarket giant announced that they were putting a conclusion with 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. At times, a 50% discount was really a 10% increase on the recommended retail price.
The incoming CEO Ron Johnson announced a shift to a new, ‘honest’ system of pricing without the fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or some other shifty tactics. The brand new system was intended not just to lower prices, but to assist consumers make informed decisions about their groceries and budgets. The fact that Honourable Ron pxuovj Jobless Johnson within less than a year probably informs 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; as well as the company quickly returned to their previous technique of artificial markdowns. When offered exactly the same products with a lower pricetag, customers still preferred to pay the greater price – so long as it experienced a discount sticker on it.
In fact, JC Penney customers were so offended through 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, nevertheless the customer base stayed away until prices were raised – in some instances higher than they originally were. An industry commentator had this to state:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it really has discovered is the fact that 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; several days later, the “everyday” price for the very same item was as much as $245.”
Discount pricing strategies are pretty much par for that 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 make sense coming from a B2C perspective. The Chartered Institute of promoting claims that attention spans are restricted to 8 seconds, as opposed to the 12 seconds they were in early 2000s.
We are now living in the data age: a world of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers want 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).
For a person involved in B2B procurement, however, discount pricing ought to be public enemy number one. Unfortunately, every workplace out of your local chip shop to the state of Ny has at once or any other fallen victim to the same ruses that operate in the supermarket.
Promotional pricing strategies in the workplace. It’s often said disparagingly of politicians which they don’t know the buying price of a pint of milk, (or in the case of the mayor of the latest York, the buying price of a pen and paper). In every honesty, however, none of us do.
Milk, bread, as well as other staples are usually far cheaper than they should be – for any number of reasons:
They could be used as being a loss leader, to draw in in customers who’ll then pay more for other considerations. They could be inferior-quality versions utilized to undercut competitors. They may be bundled with some other items as an element of an up-sell; sandwich-drink-and-snack deals at lunchtime are a great example, but there are invisible examples like coffee strainers and coffee (or printer and printers). They could be used to build trust or complacency inside the shopper, that will often judge all the prices of any retailer based on the first or most common things that they buy from them.
They could use secrets to human perception – including charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 etc); or even just including information that appears relevant but isn’t. Something which is advertised as “Only £1.99 whenever you buy 2!” may seem like a discount, but if the single unit costs £0.99 then it’s actually more costly.
All the tricks outlined above, utilized for milk and bread, apply equally well to equivalent office basics like pens and paper. It is possible to verify that yourself with just a couple minutes of searching – or checking your latest receipt.
In everyday life there’s very little we could do about this sort of obfuscation. Not many folks have enough time, resources or inclination to analyze and compare grocery prices with an item-by-item level – and also the opportunity costs of rushing from supermarket to supermarket in the quest for the least expensive potatoes by gross weight in reality probably outweigh the benefits. That’s why JC Penney’s clients are slowly returning since the prices are rising.
An organization facing similar purchasing options, however, has the advantage of a financial director to protect its decision-making process.
There’s still scope, even or possibly particularly in the age of information, to get someone on staff that can perform considered, researched procurement. Somebody that can take the time to perform a proper cost analysis; engage in slow thinking; and are available to a conclusion according to facts instead of on sound and fury.
While honesty didn’t figure out so well for Ron Johnson, we at CP Office still believe that it’s both worthwhile and worth a try. So, unlike various other stationers and vendors of office supplies, we would rather offer an impartial cost analysis to the potential prospects, in addition to the benefit from our genuinely huge discounts. With CP Office, there’s no fuss without any tricks – just a sincere discussion about what’s right for you and your office.