Saturday, May 18, 2013

Everyone loves Discounts!


May 1, also known as the International Workers' Day, is a Bank Holiday in over 80 Countries.

In 2012, a Portuguese Supermarket decided that for that day only, everyone with a shopping basket of over €100 would get a 50% discount (on top of any current discounts/promotions) .
This caused total chaos across the whole country resulting in fights over items on shelves (and own trolleys), police interventions and the struggle to fit it all into the cars, just to turn around and go back inside get more. Aside from all the accusations of dumping, this supermarket got away with it, as the investigation found out that only 2 items were sold for a minimal loss.

Although it doesnt seem relevant to us, this is a great reminder that consumers love discounts. What we can learn from this is that sometimes we can change the tactics, sacrifice part of the stock(or profit) and undercut every other bot, (announcing it as a clearance/promotion), resulting in a massive influx of Event Tickets but more importantly, Customers! Even if this process results in some loss, part of those new Customers will be back even when your prices normalize, which maximizes long-run profits.

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