Sometimes, price is negotiable. Very Negotiable.
Today, after my monthly AdFed meeting, I spoke with a media buyer about an idea that we can do for just about any price they feel is fair. It will cost us nothing, tangible or intangible. So I can name my price, they can name their price and we can create a win/win situation for all.
Haggling is not common in American culture anymore except when buying a car. But it is making a comeback in certain interesting sectors. Read more from the New York Times:
Haggling Makes a Comeback
Shoppers are discovering an upside to the down economy. They are getting price breaks by reviving an age-old retail strategy: haggling.
A bargaining culture once confined largely to car showrooms and jewelry stores is taking root in major stores like Best Buy,
Savvy consumers, empowered by the Internet and encouraged by a slowing economy, are finding that they can dicker on prices, not just on clearance items or big-ticket products like televisions but also on lower-cost goods like cameras, audio speakers, couches, rugs and even clothing.
The change is not particularly overt, and most store policies on bargaining are informal. Some major retailers, however, are quietly telling their salespeople that negotiating is acceptable.
"We want to work with the customer, and if that happens to mean negotiating a price, then we're willing to look at that," said Kathryn Gallagher, a spokeswoman for Home Depot.
In the last year, she said, the store has adopted an "entrepreneurial spirit" campaign to give salespeople and managers more latitude on prices in order to retain customers.
The sluggish economy is punctuating a cultural shift enabled by wired consumers accustomed to comparing prices and bargaining online, said Nancy F. Koehn, a retail historian at the
Haggling was common before department stores began setting fixed prices in the 1850s. But the shift to bargaining in malls and on Main Street is a considerable change from even 10 years ago, Koehn said, when studies showed that consumers did not like to bargain and did not consider themselves good at it. "Call it the eBay phenomenon," Koehn said.
"The recession is helping to push these seedlings to the surface," she added. "It's a real turnabout on the part of the buyer and the seller."
John D. Morris, an apparel industry analyst for Wachovia, said that the ailing economy was not necessarily forcing all retailers to negotiate. But he says he believes that when there is an opportunity for negotiation, the shopper has the upper hand.
"This is one of the periods where the customer is empowered," Morris said. "The retailer knows that the customer is enduring tough times -- and is more willing to be the one who blinks first in that stare-down match."
While tough times give people more incentive to change their behavior, it is the wealth of information about products made available on the Internet that gives consumers the know-how to try it. People now can quickly amass information on product availability and pricing, helping them develop strategies to get the best deal.
Michael Roskell, 33, a technology project manager from
"We play good cop, bad cop," Roskell said.
In February, he said, the friends got $20 off a pair of $250 speakers at
List price: $4,300. Price after negotiation: $3,305.50.
"My parents never did this," Roskell said. "But once you get it, you realize there's a whole economy built on this."
The strategy can even work when buying pants. At least it did for David Achee of
Among his other tactics, he said, he sometimes threatens to walk out of a store and go to a competitor, as he did recently to get a price break on a drum set at a music store. But, mainly, he relies on researching prices and coming armed with information -- prices he finds on the Internet and in ads from competitors.
"You can negotiate, but you have to do your research," said Achee, who works for the Port Authority of New York and
Information from the Internet helped Amber Kendall, 24, and her husband, Matt, when they shopped for a camera last October. The couple, who live in
The technological influences are not just on the consumer side. Retail industry analysts said corporate retailers have begun using computer systems that let them do real-time pricing and profit analysis. Such systems tell a company what price it can set and still make money, and they illuminate the trade-off between lowering prices and raising sales volumes, said Andy Hargreaves, a retail industry analyst with Pacific Crest Securities.
Hargreaves did a little negotiating himself recently. At Best Buy last November, he bargained down the price of a 50-inch Samsung plasma television.
"They gave me a number. I gave them another number, and he gave me a final number," he said, noting that he got a $100 price break in addition to the $200 sale discount. "A lot of people don't realize you can go into Best Buy and ask them for a lower price."
Frederick Stinchfield, 23, was a Best Buy salesman in
Salespeople and managers had the latitude to drop prices, though some were more likely to do so than others.
His advice for bargainer hunters? "If you get denied once, go looking for someone else who looks nice," said Stinchfield, who now works for the federal government in
There is just one problem with the theory, Raghubir said. It does not prove true over time.
Rather than retaining customers, the rise in haggling is making shoppers highly price-conscious and loyal ultimately to the least expensive offer, not to a brand or a retailer.
Home Depot, among others, begs to differ. Gallagher, the company spokeswoman, said that by allowing salespeople and store managers to make some pricing decisions, the company was creating a friendly environment that feels more like a local store than a monolithic corporate superstore. (She declined to say how much leeway individual salespeople or managers have.)
Raghubir says that retailers are realizing that customers are going to keep pressing them on price, because whatever reticence customers had about bargaining has evaporated.
"In the past, when you tried to get yourself a deal and it was an embarrassing thing -- the kind of thing you did if you couldn't afford to pay," she said. "Now it's about being a smart shopper."
(Source: The
No comments:
Post a Comment