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
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.