Just like any of you I am really excited about this season. I love the shopping experience. I always wonder how a retailer can sell their stuff with such large discounts. Are they selling at a loss? Why can’t they always give this kind of a discount? I always wonder. Let’s remove the shopper’s hat away and let’s put the lean cap on.
How come a 55 inch 3D HD TV which was selling for about $4000 is available for about $ 1900? How a women’s watch can be sold for 50% of its original price? How a men’s watch can be sold with a 79% discount? How come there are 50%+discounts on ladies shoes? Amazing isn’t it? Ideally, if anyone can offer a discount this season, they should be able to do so in any of the seasons. But why is that not happening? Are retailers and these big brands ripping us off?
We will have to check how this buying season works to understand these huge discounts better. Think about it? All the year, retailers and brand owners spend tons of money advertising asking us to come to them and buy from them. They use their advertising money to create their brands and creating a need in us. But we do not have money they are asking for to buy their product. So most of us want the stuff, but do not have the money or the mood for buying.
But in this season, we certainly have the mood for buying, and we somehow manage to keep some extra cash with us. So in this season all the ingredients are in place. We have a real or a perceived need for the products and services. We have the money and mood for buying. And everyone else is buying too. So why should we wait? This is the thinking behind this season.
So sellers do not have to spend tons of money on creating the mood and the need. They can spend this money as a discount to get more customers. In addition sellers do not want to carry the old inventory to the New Year. Especially electronics might be outdated in the New Year. So it will be actually profitable for them to sell their inventory as soon as possible. And some sellers may even lose some money on discounting products heavily so that they can drive as many customers as possible to their shops. Once the customer is in, they can sell other stuff to them. So overall the seller can make a profit. This is how some of the retailers get 40-50% of their annual sales in this season. Isn’t this amazing?
In addition, I am currently thinking about what are the gifts I should buy for my loved ones. I am in the process of preparing it. I want it to be interesting, useful and not so expensive. Can anyone help me? Any suggestions?