If you’ve been trying to find cheap office supplies online or discount stationery in your area, then right now you are probably feeling like you’ve stumbled onto the set of Carry On At The Circus. It’s difficult to get a read on what’s a suitable price to pay for pens, paper, printer ink or biscuits – specifically when you’re ordering in large quantities. Whomever your supplier is, you’re likely to achieve massive savings over high-street prices.
On the other hand, you can still find yourself paying 2 to 3 times over the odds. A reduction promotion or buy-one-get-one-free offer is a warning signal, and almost definitely forms a part of a pricing strategy which will view you paying more for stationery and office supplies.
If you’re a monetary director or office administrator, you might be clued in to the big secret – but for the rest individuals, here’s the main one secret that’s planning to wipe off as much as half your office supplies expenses in just one swift movement:
Stop looking for discounted office supplies – It’s not a call to arms over quality control – for some situations, it may even be appropriate to go for the budget option instead of the high-end one. Nor is it about wastage and logistical planning, although proper cost analysis is a crucial component of managing your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, basic principles of pricing. Though there are complicated concepts at work, it boils down to simple human nature.
We’re hard-wired to go after the option using the big shiny ‘discount’ sticker on the front – even when it’s more expensive. It’s a bizarre little quirk of the human brain, then one that’s difficult to shut down – as US retailer JC Penney discovered for their ongoing regret.
Back in 2012, the supermarket giant announced that they were putting a conclusion to their promotional pricing strategy, which saw everyday staples with 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 actually a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to a different, ‘honest’ system of pricing without any fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or any other shifty tactics. The newest 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 became Jobless Johnson within under a year probably informs you how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with feelings of anger over what they perceived as a betrayal; revenue and share price went into freefall; and also the company quickly returned for their previous strategy of artificial markdowns. When offered the identical products using a lower pricetag, customers still preferred to pay the greater price – as long since it had a discount sticker on it.
In fact, JC Penney customers were so offended through the disastrous strategy that brand loyalty not only went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The company actually issued an apology to jilted shoppers, but the customer base stayed away until prices were raised – in some instances higher than they originally were. An industry commentator had this to say:
“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 maybe more at JC Penney almost overnight. 1 week, a side table was listed at $150; a few days later, the “everyday” price for the similar item was approximately $245.”
Discount pricing strategies are pretty much par for your course on the high-street – and, because the BBC uncovered, a lot of them are as arbitrary and misleading as JC Penney’s. And, in most cases, they can make sense coming from a B2C perspective. The Chartered Institute of Marketing claims that attention spans are restricted to 8 seconds, rather than the 12 seconds they were during the early 2000s.
We live in the information age: a arena of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers have to make decisions quickly based on limited information. Discounting is an immediate recognisable signal which a wise purchasing decision will be made, (whether true or not).
* For someone associated with B2B procurement, however, discount pricing should be public enemy number one.
* Unfortunately, every workplace out of your local chip shop for the state of the latest York has at the same time or any other fallen victim for the same ruses that operate in the supermarket.
* Promotional pricing strategies in the office
* It’s often said disparagingly of politicians they don’t know the cost of a pint of milk, (or in the case in the mayor of brand new York, the price of a pen and paper).
In most honesty, however, none of us do. Milk, bread, and other staples are typically far less expensive than they should be – for numerous reasons:
They could be used as a loss leader, to draw in in customers who’ll then pay more for other considerations.
They might be inferior-quality versions used to undercut competitors.
They might be bundled with some other items as part of an up-sell; sandwich-drink-and-snack deals at lunchtime are a good example, but you will find invisible examples like coffee strainers and coffee (or printer ink and printers).
They could be utilized to build trust or complacency within the shopper, that will often judge all of the prices of any retailer based on the first or most common items that they buy from them.
They could use secrets to human perception – including charm pricing (like.9 or.7); pricing under benchmarks (such as £1, £5, £10 etc); or even just including information that looks relevant but isn’t. A thing that is advertised as “Only £1.99 when you buy 2!” may look like a discount, however if the single unit costs £0.99 then it’s actually more costly.
All of the tricks outlined above, utilized for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that for yourself with just a couple of minutes of searching – or checking your latest receipt.
In day-to-day life there’s not much we can do concerning this kind of obfuscation. Only a few individuals have time, resources or inclination to analyze and compare grocery prices with an item-by-item level – as well as the opportunity costs of rushing from supermarket to supermarket in the search for the least expensive potatoes by gross weight in fact probably reeydf the benefits. That’s why JC Penney’s consumers are slowly returning as the prices are rising.
A company facing similar purchasing options, however, has the main benefit of a monetary director to guard its decision-making process.
There’s still scope, even or possibly specifically in age of information, to possess someone on staff who can perform considered, researched procurement. Somebody that can take the time to perform a proper cost analysis; participate in slow thinking; are available to a conclusion based upon facts instead of on sound and fury.
While honesty didn’t work out so well for Ron Johnson, we at CP Office still think that it’s both worthwhile and worth a go. So, unlike various other stationers and vendors of office supplies, we choose to provide an impartial cost analysis to our own potential customers, in addition to the benefit of our genuinely huge discounts. With CP Office, there’s no fuss with no tricks – just an honest discussion about what’s most effective for you and your office.