If you’ve been trying to find cheap office supplies online or low cost stationery in your town, then by now you are probably feeling like you have stumbled onto the set of Continue At The Circus. It’s tough to get a read on what’s an appropriate price to pay for pens, paper, printer or biscuits – particularly when you’re ordering in bulk. Whomever your supplier is, you are likely to achieve massive savings over high-street prices.
On the contrary, you are able to still find yourself paying 2 to 3 times on the odds. A reduction promotion or buy-one-get-one-free offer is a warning signal, and more than likely forms part 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 already be clued into the big secret – but throughout 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 Bulk School Supplies For Cheap
It’s not really a call to arms over quality control – for some situations, it could be appropriate to choose the budget option rather than the high-end one. Nor is it about wastage and logistical planning, although proper cost analysis is a vital part 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 work, it depends upon simple human nature.
We’re hard-wired to visit after the option with the big shiny ‘discount’ sticker on the front – even if it’s higher priced. It’s a bizarre little quirk in the brain, and something that’s hard to shut down – as US retailer JC Penney discovered with their ongoing regret.
Way back in 2012, the supermarket giant announced they were putting a stop to 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. At times, a 50% discount was actually a 10% increase on the recommended retail price.
The incoming CEO Ron Johnson announced a shift to a different, ‘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 aid consumers make informed decisions with regards to their groceries and budgets. The fact that Honourable Ron pxuovj Jobless Johnson within under a year probably tells 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; and the company quickly returned for their previous technique of artificial markdowns. When offered the identical products with a lower pricetag, customers still preferred to pay for the greater price – provided that it experienced a discount sticker on it.
In reality, 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 client base stayed away until prices were raised – in some instances greater than they originally were. An industry commentator had this to say:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it has discovered is the fact that prices of certain items-designer furniture, in particular-have risen by 60% or maybe more at JC Penney almost overnight. One week, a side table was listed at $150; a couple of days later, the “everyday” price for the similar item was approximately $245.”
Discount pricing strategies are virtually par for your course on the high-street – and, as the BBC uncovered, many of them are as arbitrary and misleading as JC Penney’s. And, for the most part, they can make sense from a B2C perspective. The Chartered Institute of advertising claims that attention spans are limited to 8 seconds, rather than the 12 seconds that they were during the early 2000s.
We are now living in the information age: a realm of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers need to make decisions quickly based on limited information. Discounting is surely an immediate recognisable signal that the wise purchasing decision will be made, (whether true or not).
For somebody associated with B2B procurement, however, discount pricing needs to be public enemy primary. Unfortunately, every workplace out of your local chip shop to the state of New York has at once or other fallen victim for the same ruses that operate in the supermarket.
Promotional pricing strategies in the workplace. It’s often said disparagingly of politicians that they don’t know the price of a pint of milk, (or with regards to the mayor of the latest York, the cost of a pen and paper). In every honesty, however, none of us do.
Milk, bread, as well as other staples are typically far less than they must be – for numerous reasons:
They could be used being a loss leader, to draw in customers who’ll then pay more for other items. They could be inferior-quality versions used to undercut competitors. They may be bundled with some other items as part of an up-sell; sandwich-drink-and-snack deals at lunchtime are a wonderful example, but you can find invisible examples like coffee strainers and coffee (or ink and printers). They might be employed to build trust or complacency within the shopper, that will often judge each of the prices of the retailer based on the first or most common things that they buy from them.
They could use secrets to human perception – like charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 and so on); or even just including information that appears relevant but isn’t. A thing that 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 higher priced.
All of 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 few minutes of searching – or checking your most current receipt.
In day-to-day life there’s not a whole lot we could do about this sort of obfuscation. Only a few people have enough time, resources or inclination to research and compare grocery prices upon 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 advantages. That’s why JC Penney’s customers are slowly returning since the costs are rising.
A company facing similar purchasing options, however, has the benefit of an economic director to guard 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 who can take time to conduct a proper cost analysis; take part in slow thinking; and come to your conclusion based upon facts as opposed to on sound and fury.
While honesty didn’t figure out very well for Ron Johnson, we at CP Office still believe that it’s both worthwhile and worth a shot. So, unlike many other stationers and vendors of office supplies, we would rather offer an impartial cost analysis to the potential prospects, in addition to the benefit of our genuinely huge discounts. With CP Office, there’s no fuss without any tricks – just a genuine discussion about what’s right for you and your office.