Fake sales: death by marketing

The papers are full of stories alerting customers that massive discounts in the sales are meaningless because the original prices were highly inflated and only a few items were sold at that price to a few people who got badly ripped off. Even after a 70% discount, the sale price can often still mean an actual 45% mark-up for the retailer (to save you the mental arithmetic, that means some shoppers have actually paid almost 5 times the original price paid by the shop).

A few thoughts:

1) Why is this practice still happening? It is supposed to have been banned. Are the authorities all on holiday?

2) The banks have had several fines now and had to repay billions due to bad selling campaigns, such as in credit card insurance or mortgage protection. How long can it be before a class action against the big retailers using fake discount practices is launched on behalf of the sacrificial customers who paid far too much for something so that many others could get a fair price later under the marketing pretense of a deep discount?

3) How long after that will it be before some of the claimed discounts are enforced on a sensible original price as a punishment?

4) How long will it be before one of the big retailers seizes the obviously vacant moral high ground of playing fair and uses the advantage to blast competitors and seize huge market share. With a struggling economy, the advantage of being first mover could be huge.

5) How long will customers who have been ripped off in this way remember the companies who did it and tend to buy from their competitors instead? Has nobody in their marketing departments ever heard the expression ‘once bitten, twice shy’?

6) Has anyone in these companies done any proper agent-based modelling to study the effect of people delaying or even abandoning purchases because they don’t want to be the sacrificial customer? Many people are struggling financially, and will have huge problems buying their loved ones Christmas gifts. If they have also to worry about the exact timing of purchase to make sure they don’t get ripped off, they will struggle even more. In a recession that cause so many people so much misery already, this practice borders on inhuman.

7) Has nobody taken account of the system-wide effects of concentrating  too large a proportion of shopping into a short period such as Black Friday? It cannot possibly be optimal from a logistics point of view. It must also cause severe stress for any employees that have to work extremely hard for short periods and then be unemployed on zero hours for the other days. Again, the system-wide effects can’t be overall beneficial.

9 Why try to rip customers off as much as you can get away with? Why not instead treat customers with respect and offer relatively constant prices with a fair markup and watch your profits go up?

10) Many companies have died because of accountants thinking they were being cleverer than reality shows when their company eventually dies. Will the biggest cause of corporate demise be death by accountant or death by marketer?

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