Does anyone remember the J.C. Penney Debacle of 2014? They too ditched promotions in favour of EDLP (Everyday low pricing). Their strategic mistake was to replace promotional prices with everyday low prices.
The old policy had been working well because it hyped consumer emotions, making them feel astute. After this change of strategy, JC Penney basically took away the shopper’s sense of achievement from making a saving.
To be fair, JC Penney has since brought back the original pricing strategy. But so far they have failed to bring the excitement back, offering a valuable lesson to modern marketers: Once the buzz is gone, it is hard to revive it.
Psychologically, the message is clear. Shoppers want and need special offers!
I have been studying the psychology of promotions and human emotion for a number of years now and have identified 497 specific psychological rules and behavioural traits that relate directly to the perceived desirability of an added value product in-store.
The key to successful added value offers in terms of not misleading shoppers and yet giving them a sense of reward is to understand how they really mentally respond to promotions in-store. And unfortunately you can’t do that by asking them!
Most promotional influence takes place in human working memory which retains information for a maximum of 18 seconds. Either that or special offers impact on the mental reward centres that operate below conscious awareness.
In summary, when it comes to special offers, studying actual behaviour reveals much more than paying attention to any claimed behaviour.
So let’s not scrap all the offers, but instead work towards better in-store promotion. Something that provides added value for shoppers. Between us we can make things better: Better for brands, better for businesses and most importantly better for shoppers and consumers.
