IT'S ON SALE!

February 1998

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IT'S ON SALE!

Deep discounts may not be enough to make consumers buy; they want to know why prices dropped

 

If you advertise discounts, you'd better explain why in your ad copy. According to a study described in the Journal of Retailing from New York University, consumers are more likely to believe an advertised price reduction represents a true bargain if they're told why.

The explanation that garners the best response is that you're passing along the savings from volume buying. This rationale makes retailers seem refreshingly forthright in admitting they paid less than usual for the merchandise and generous

by letting consumers benefit from their buying prowess, the researchers say. According to the study, this reason wipes out the skepticism usually raised by claims such as "25% off" or "50% off."

Consumers are much less willing to bite if the retailer says his price cuts are due to an inventory clearance - perhaps because this implies the store is trying to unload undesirable merchandise. This study's researchers didn't touch the ever-popular "holiday sale" rationale, saying it was too vague a motivation to include.



Copyright © 1998 by Bond Communications.


 

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