We all like a bargain, don’t we? It’s thrilling! What is it that excites us so much? – is it because we feel we’re saving money? Perhaps we love the idea of getting something for less money than it is worth? Or do we like the idea that we’ve paid less for an item than somebody else? Whatever it is that pushes our buttons, bargains are big business – with flash sales (Sale MUST end tomorrow!), BOGOFs and seasonal offers everywhere, tempting us to spend our cash.
How and Why do Retailers Give Us Bargains?
If you think about it I’m sure you’ll realise that retailers need to make a profit, so they certainly won’t be planning to sell anything at a loss. The retailer generally wants to buy something as cheaply as they can and sell it on for as much as they can get. It’s the retailer’s job to work out how high a mark-up they can charge on something they’ve bought – if they go too high the item won’t sell, if they go too low they won’t make enough to cover their costs. They pitch the price by analysing the market and how much people will spend on a particular item. For branded, designer items you can expect to pay well over a hundred times more than the retailer paid (read more about mark-ups here).
But retailers have to consider their costs. If they can’t pay their bills then they will go out of business. Using bargains is a great way to manage their money coming in. For example:
- They might need to clear space for new stock which they believe will sell at a higher price because it’s more fashionable/the new version or it’s the right season. They can then sell off the remaining, older stock (often with less popular/out of date items left) at a cheaper price. It’s unlikely that this will be sold at a loss, but significantly cheaper than it was originally priced. It’s still income and better than being in a box in the storeroom.
- For high fashion items the prices can be massively inflated initially and then reduced after a certain amount of time when interest is waning. In fact, with a super fast supply chain some clothing brands are even able to order more of an item that proves popular and have it on the shelves in less than 4 weeks! (Click here to listen to a Recent BBC ‘The Bottom Line’ with Evan Davis exploring this topic).
- Offering a discount price to someone who is already a customer is a great way of encouraging loyalty. By approaching these customers directly, who are more likely to buy anyway, the retailer is saving money on advertising so reducing their costs which means they can afford to sell slightly cheaper. They are also hoping that the customer will buy some full price goods when they are visiting the shop/site (and tell their friends!).
- Often a discount sign or voucher is available to attract new customers. The retailer is hoping to engage you and turn you into a loyal customer.
But the key message is – it is a business transaction. They are not giving you anything.
So are Bargains Good or Bad?
The key issue here is do you actually want the item you are buying? If you do, and you are happy with the price bearing in mind that it is a business transaction then why not? If you are only buying the item because it is cheap then perhaps it is worth thinking about whether you really want it. What will happen to it after you’ve bought it? Will it sit in the back of the wardrobe or go to the charity shop (or the bin). If you are buying as a gift (yes I know we all have huge pressures to buy lots of gifts at Christmas and for birthdays) will the recipient actually want this or will they just dispose of it? But if you see the perfect item and it just happens to be on sale too, then fantastic!
Unfortunately the thought of a bargain does drive some people into a frenzy, and retailers sometimes capitalise on this. ‘Black Friday’ is a recent phenomenon – it’s the day retailers reduce their prices at the start of Christmas shopping. Sometimes retailers open as early as 3am (or even midnight) and offer huge sales. This has led to queues outside, crowd control issues and even violence as consumers adopt a dog eat dog attitude to get the best deals. Really? Knocking someone else out of the way just to get a cheap TV? Enough said.
Another issue that is gradually gaining awareness amongst consumers is the fact that not all retailers and brands do pay a fair price for their products in the first place. In order to offer as low a price as possible it has become the norm to force down the amount paid to the people to make the items. In the garment industry abuse of the workers is rife – with unsafe working conditions, low pay (or even no pay), child labour and long working hours in many cases. Consumer education is key here – most people don’t want others to suffer just so they can buy cheap products. Watch the video below which was produced for Fashion Revolution this year. It shows what happens when consumers’ eyes are opened to what happens to bring them bargain clothes.
There are a growing number of retailers and brands who do offer fairtrade and ethical brands. Some of these can tell you how your products were made and by whom (we can! – check us out at Where Does It Come From?). This will give you the reassurance of knowing that your products have been made without having a negative effect on someone else.
Consumerism itself is an interesting dilemma. Do we just buy too much? Of course we all need to buy things that are necessary to our lives or even because we really want them. But has it gone a bit too far? The recent film ‘The True Cost’ put forward a theory that our consumer lifestyle has got to the point that many people are constantly dissatisfied with what they have and buy more and more in the unlikely hope that it will make them happier. If it does it won’t be for long. In the meantime more goods are being created – cheaper, lower quality and most of it ends up in landfill.
So, in summary, bargains are a great way of getting something you wanted anyway at a better price. They are also useful for retailers to clear old stock, to attract new customers and to retain old ones. On the other hand, it is possible that some people are duped into buying to ‘save money’ (you save more by not buying it at all…..) and this feeds the consumer society, the poor treatment of production workers and the growing piles of unwanted, low quality or ‘out-of-date’ items.
Should I Buy a Bargain Then?
I was given a great piece of advice by a stylist (for choosing clothes but applies to all products really). If you would buy the garment however high the price then buy it, because you love it and will cherish it and feel fabulous when you wear it. If you are buying the item just because it’s cheap then you probably won’t wear it much because you don’t value it, plus you won’t value yourself when you wear it.
Ask yourself if you really love and need your bargain item. Ask yourself why it is cheap – is someone else paying the price? Ask yourself what’s going to happen to it in the future. If you are happy with the answers you have given yourself then wahoooo – you’ve got yourself a bargain!