If you’ve been trying to find cheap office supplies online or discount stationery in the area, then by now you are probably feeling like you’ve stumbled onto the set of Continue At The Circus. It’s tough to get a read on what’s the right price to cover pens, paper, printer ink or biscuits – specially when you’re ordering in large quantities. Whomever your supplier is, you’re prone to achieve massive savings over high-street prices.
On the other hand, you can still wind up paying 2-3 times over the odds. A price 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 a financial director or office administrator, you could be clued in the big secret – but for the rest of us, here’s usually the one secret that’s likely to wipe off just as much as half your workplace supplies expenses in a single swift movement:
Stop trying to find Office Supplies Online
It’s not a call to arms over quality control – for a few situations, it might even be appropriate to go for the budget option as opposed to the high-end one. Nor could it be about wastage and logistical planning, although proper cost analysis is a crucial part of managing your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, fundamental principles of pricing. Even though there are complicated concepts at the job, it comes down to simple human nature.
We’re hard-wired to visit after the option with all the big shiny ‘discount’ sticker on the front – even when it’s more expensive. It’s a bizarre little quirk in the brain, then one that’s challenging 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 at a permanent discount. Like the majority of supermarkets, JC Penney was artificially inflating their shelf prices before providing them with an arbitrary discount. Sometimes, a 50% discount was really a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to a new, ‘honest’ system of pricing without any fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or some other shifty tactics. The newest system was intended not only to lower prices, but to assist consumers make informed decisions about their groceries and budgets. The fact that Honourable Ron pxuovj Jobless Johnson within under a year probably lets you know how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a sense 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 same products having a lower pricetag, customers still preferred to pay the greater price – so long as it experienced a discount sticker onto it.
Actually, JC Penney customers were so offended through the disastrous strategy that brand loyalty not merely 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 – sometimes greater than they originally were. A niche commentator had this to express:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it has discovered is that the prices of certain items-designer furniture, specifically-have risen by 60% or even more at JC Penney almost overnight. One week, a side table was listed at $150; several days later, the “everyday” price for the very same item was as much as $245.”
Discount pricing strategies are pretty much 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, typically, they make sense from the B2C perspective. The Chartered Institute of Marketing claims that attention spans are restricted to 8 seconds, instead of the 12 seconds they were in the early 2000s.
We reside in the details age: a world of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers want to make decisions quickly based upon limited information. Discounting is definitely an immediate recognisable signal which a wise purchasing decision is being made, (whether true or otherwise).
For somebody involved with B2B procurement, however, discount pricing ought to be public enemy number 1. Unfortunately, every workplace out of your local chip shop to the state New York has at once or 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 they don’t know the price of a pint of milk, (or when it comes to the mayor of the latest York, the cost of a pen and paper). In most honesty, however, none people do.
Milk, bread, as well as other staples are usually far less expensive than they should be – for numerous reasons:
They may be used as being a loss leader, to draw in in customers who’ll then pay more for other items. They may be inferior-quality versions employed to undercut competitors. They might be bundled with 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 inside the shopper, who can often judge each of the prices of any retailer based on the first or most frequent items which they buy from them.
They might use tricks of human perception – like charm pricing (like.9 or.7); pricing under benchmarks (such as £1, £5, £10 and so forth); or perhaps just including information that appears relevant but isn’t. Something which is advertised as “Only £1.99 once you buy 2!” may seem like a reduction, however, if the single unit costs £0.99 then it’s actually more expensive.
All the tricks outlined above, used for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that yourself with just a few minutes of searching – or checking your most recent receipt.
In day-to-day life there’s very little we are able to do about this kind of obfuscation. Very few people have enough time, resources or inclination to investigate and compare grocery prices on an item-by-item level – as well as the opportunity costs of rushing from supermarket to supermarket in the quest for the cheapest potatoes by gross weight in reality probably outweigh the rewards. That’s why JC Penney’s clients are slowly returning since the costs are rising.
A company facing similar purchasing options, however, has the benefit of a monetary director to protect its decision-making process.
There’s still scope, even or possibly particularly in age of information, to possess someone on staff who are able to perform considered, researched procurement. Somebody that can take the time to perform a proper cost analysis; engage in slow thinking; and come to some conclusion based upon facts as opposed to on sound and fury.
While honesty didn’t exercise very well for Ron Johnson, we at CP Office still believe that it’s both worthwhile and worth a go. So, unlike many other stationers and vendors of office supplies, we prefer to offer an impartial cost analysis to our own potential customers, in addition to the advantage of our genuinely huge discounts. With CP Office, there’s no fuss without any tricks – just an honest discussion about what’s best for you and your office.