If you’ve been trying to find low priced office supplies online or discount stationery in your area, then by now you’re probably feeling like you have stumbled onto the set of Carry On At The Circus. It’s hard to get a read on what’s the right price to cover pens, paper, printer ink or biscuits – specifically when you’re ordering in big amounts. Whomever your dealer is, you’re very likely to achieve massive savings over high-street prices.
On the other hand, you are able to still end up paying 2 to 3 times on the odds. A price reduction promotion or buy-one-get-one-free offer is actually a warning signal, and almost certainly forms element of a pricing strategy that can look at you paying more for stationery and office supplies.
If you’re an economic director or office administrator, you might be clued in to the big secret – but for the rest of us, here’s usually the one secret that’s going to wipe off just as much as half your office supplies expenses in just one swift movement:
Stop looking for Bulk School Supplies For Cheap
It’s not just a call to arms over quality control – for a few situations, it could even be appropriate to go for your budget option rather than the high-end one. Nor is it about wastage and logistical planning, although proper cost analysis is an important element of managing your office budget. Rather, it’s a question of Bayesian signalling; Gricean logic; and, ultimately, fundamental principles of pricing. Although there are complicated concepts at the office, it boils down to simple human nature.
We’re hard-wired to visit following the option with the big shiny ‘discount’ sticker on the front – even though it’s higher priced. It’s a bizarre little quirk from the brain, and one that’s hard to turn off – as US retailer JC Penney discovered to their ongoing regret.
Back in 2012, the supermarket giant announced they were putting an end for their promotional pricing strategy, which saw everyday staples in a permanent discount. Similar to most supermarkets, JC Penney was artificially inflating their shelf prices before giving them an arbitrary discount. Occasionally, a 50% discount was actually a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to an alternative, ‘honest’ system of pricing without any fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or other shifty tactics. The newest system was intended not only to lower prices, but to assist consumers make informed decisions regarding their groceries and budgets. The reality that Honourable Ron pxuovj Jobless Johnson within under a year probably informs you how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a feeling of anger over whatever they regarded as a betrayal; revenue and share price went into freefall; as well as the company quickly returned to their previous strategy of artificial markdowns. When offered exactly the same products using a lower pricetag, customers still preferred to pay the larger price – provided that it experienced a discount sticker into it.
In fact, JC Penney customers were so offended by the disastrous strategy that brand loyalty not merely went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The business actually issued an apology to jilted shoppers, but the subscriber base stayed away until prices were raised – in some instances more than they originally were. An industry commentator had this to state:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. Exactly what it has discovered is that the prices of certain items-designer furniture, specifically-have risen by 60% or more at JC Penney almost overnight. One week, a side table was listed at $150; several days later, the “everyday” price for the similar item was up to $245.”
Discount pricing strategies are pretty much par for your course on the high street – and, because the BBC uncovered, most of them are as arbitrary and misleading as JC Penney’s. And, in most cases, they make sense from the B2C perspective. The Chartered Institute of promoting claims that attention spans are restricted to 8 seconds, as opposed to the 12 seconds that they were in early 2000s.
We reside in the details age: a realm of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers need to make decisions quickly based upon limited information. Discounting is an immediate recognisable signal that the wise purchasing decision will be made, (whether true or otherwise).
For someone involved with 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 price of a pen and paper). In most honesty, however, none individuals do.
Milk, bread, as well as other staples are generally far less expensive than they should be – for a variety of reasons:
They might be used as a loss leader, to attract in customers who’ll then pay more for other items. They might be inferior-quality versions used to undercut competitors. They might be bundled with other items as an element of an up-sell; sandwich-drink-and-snack deals at lunchtime are a good example, but there are invisible examples like coffee strainers and coffee (or printer and printers). They could be used to build trust or complacency in the shopper, who can often judge all the prices of a retailer based on the first or most common items that they buy from them.
They could use tricks of human perception – such as charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 etc); or perhaps just including information that looks relevant but isn’t. Something which is advertised as “Only £1.99 once you buy 2!” may appear to be a discount, but if the single unit costs £0.99 then it’s actually more expensive.
All of the tricks outlined above, used for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that for yourself with just a few minutes of searching – or checking your most current receipt.
In daily life there’s very little we can do about this sort of obfuscation. Not many individuals have the time, resources or inclination to research and compare grocery prices with an item-by-item level – as well as 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 rewards. That’s why JC Penney’s consumers are slowly returning because the costs are rising.
A business facing similar purchasing options, however, has the main benefit of a monetary director to safeguard its decision-making process.
There’s still scope, even or maybe especially in age information, to get someone on staff who are able to perform considered, researched procurement. Somebody that can take time to conduct a proper cost analysis; take part in slow thinking; and come to a conclusion based on facts instead of on sound and fury.
While honesty didn’t figure out very well for Ron Johnson, we at CP Office still feel that it’s both worthwhile and worth a shot. So, unlike many other stationers and vendors of office supplies, we choose to present an impartial cost analysis to our potential customers, as well as the benefit from our genuinely huge discounts. With CP Office, there’s no fuss and no tricks – just a genuine discussion about what’s best for you along with your office.