They say strength is the capacity to break a chocolate bar into four pieces with your bare hands – and then eat just one of the pieces. My willpower is sometimes so weak that I am lucky if a second candy bar doesn’t get broken! And this is how I use to feel every time I went into a store. I would get pulled into what I “thought” were good deals and I would blow my budget almost every time. After starting to coupon more effectively I began to clearly see that sales were cyclical. I also began to study the pricing strategies of my favorite stores. What I found was a cleverly hidden set of marketing strategies designed to draw you in and/or bring you back to the store. Half the battle in learning to shop smart is to know these strategies and policies before you shop. If you know what pitfalls to avoid, you are more likely to get out under budget.
Have you noticed that items tend to go on sale periodically? This cycle is anywhere from 8 to 16 weeks depending on the item. This amount of time is sometimes determined by whether or not the product is a “loss leader.” A loss leader is a good or service offered at a deep discount (generally below cost) in order to attract new customers to a store. The intent of this marketing strategy is to not only have the customer buy the (loss leader) sale item, but other products as well. Stores use loss leader pricing when they want to move overstock, give brand awareness, or increase foot traffic at their stores. Take advantage of this by recognizing their ploy and only buy the loss leader and of course use a coupon to sweeten the deal!
Items on sale that are not loss leaders are usually not discounted by much but are part of pricing strategies. A few of those are: vendor pricing (aka MSRP), competitive pricing or price matching, multiple pricing like 10 for $10, and psychological pricing. “Psychological pricing” means that we are more likely to buy products with prices that end in 5, 7, or 9. I find it fascinating that we will buy something priced at $9.99 with no problem and the minute it says $10.00 we think twice. This is why I always round up mentally when looking at prices.
Another pricing strategy, that is popular with couponers, is discount pricing. Do you know the difference between a sale, close out, clearance, and a markdown? It could make a big difference as to whether to use your coupon with a sale now or wait and use it on a clearance. A sale is when a store will reduce the prices of selected items only; the prices are likely to go back up after the sale is over. A markdown is when a store decides to adjust the price of an item temporarily, sometimes permanently, to help move inventory. A clearance item is at a deeper discount than a sale item and is usually the stores attempt at reducing stock it no longer wants. A close out is when a store wants to get rid of stock it no longer intends to carry. I have found that some stores will say “close out” when it really should be called a clearance. Does this mean a sale isn’t as good as a close out? Not really. It all depends on your stockpile price. Just because an item is on sale and there is an available coupon doesn’t mean it is a good deal. This is why knowing your own stockpile price is so important.
Now you know what to look for when you are shopping or are preparing to purchase an item. Hopefully with this information you will have some strategies of your own to save BIG!
About me:
I’m Heather McIngvale, a stay at home mom of four (two here and two in heaven). I enjoy couponing, cooking, gardening, and all things crafty. I also volunteer in my church and in my community, and started a foundation with my local hospital’s NICU on behalf of our stillborn twins. When I got pregnant with our last child in 2009, I started getting SERIOUS about couponing and saving money to supplement our budget. I was doing so well at couponing, friends would ask me my secrets. That is when I started Heather’s Hints and it all grew from there!
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