Retailers run sales for one reason -- and it isn't what you think. More often than not, sales merely get you in the door, where stores easily trick you into buying more. That's the goal.
"Retailers are very skilled at stimulating impulse-purchase behavior," says Bryan Heathman, an author and consumer behavior expert. "If you can discipline yourself not to respond to impulse purchases, that's the No. 1 way to save."
Don't get suckered by sales
- Understand the stores' motives.
- Know the types of sales.
- Get a feel for the landscape.
- Arm yourself with pricing info.
- Clip coupons for better deals.
- Look for quality, good values.
However, buying-triggers go far beyond candy near the checkout line. When you recognize sophisticated retail ploys, you can cruise through any store -- warehouse to boutique -- with less of a headache and more money in your pocket.
Understand the stores' motivesStores need the amount each person spends each visit, called "average transaction amount," to be as high as possible: drugstores, $15; grocery, at least $25; warehouse, topping $100. They do this by selling products with a variety of built-in profits. If you buy eggs on sale, but then grab some expensive, newfangled juice, the store wins.
Stores make less money or even lose money on individual sale items. Retailers select these crazy-cheap products, called "loss leaders," because they know you buy them often and will remember the price, says Amanda Setili, a consultant with Setili & Associates, which serves retailers and their suppliers. It's all done with the hope you'll buy high-profit items, too.
Take the $5 turkey. Around Thanksgiving, you can buy cheap turkeys, with one caveat -- a purchase of $25 or more.
Know the types of salesDifferent sales generate different response rates. "The most compelling thing you can offer is something free," says Heathman. "If you say, 'Free MP3 player to the first 100 customers through the door,' that's going to get your highest response rate. The second highest response rate you get is from a 50-percent-off offer. The third highest is buy one, get one free."
Do the math, though, and you'll see that 50-percent-off and buy-one-get-one deals are essentially the same thing pricewise, even though the motives are different. One gets you in the door. The other urges you to stock up -- much like 10 for $10 offers -- whether you need to or not.
Because 50 percent off is a critical tipping point, assume that sales below that aren't necessarily great deals while any sale above it might be.
Still, loss leaders -- products sold below actual value -- remain the best deals. Purchase only these wild bargains and ignore everything else, and you can save serious money.
Get a feel for the landscapeAnytime you feel a sudden urge to buy, look for impulse triggers. Grocery stores, including many warehouses, use a "golden horseshoe" layout, with products that are needed most shelved down the sides and across the back of the store. This setup requires shoppers to walk past numerous traps. "While there is a lot of dollar volume generated in those horseshoe areas, profit margins are driven more by impulse purchases," says Heathman.
Grocery store speed traps
- Around big family/food holidays, look for impulse traps near meat freezers and in the baking aisle.
- Before Valentine's Day, avoid extra displays in the card aisle.
- Super Bowl Sunday and July Fourth are huge chip and soda sales times, so watch for impulse traps on your way to buy snacks, which typically are impulse items at other times of the year.
Retailers design the front third of a grocery store for impulse buyers, but like highway speed traps, triggers sometimes pop up in other spots, usually as temporary cardboard displays.
The same is true in other stores. It's no coincidence retailers put clearance sales at the back or commonly needed merchandise on tables -- rather than shelves or racks -- just inside the door or in major aisles. Items displayed on tables sell much faster. "People are more likely to impulse shop from a table," says Lynn Switanowski-Barrett, a retail consultant with Creative Business Consulting Group.