We Love Sales!
Before starting, we would like to give you two options. Firstly, a package of soup with beautiful colours on it, which is clearly discounted from $2,00 to $1,36. Secondly, you can choose a white, boring package of the same kind of soup, however, priced $1,35. What choice would you make? Furthermore, assuming that we discuss the same product, what would be a more effective tactic for firms: always sell the product for the lowest price possible, or once in a while give a bigger reduction on the price to customers? Did consumers change their strategy for purchasing products in general, or are there more factors playing an important role here? Who gains the most? The consumers? Are the firms now setting the markets more and more, coming out on top? This is what we will try to find out with this article.
Dutch consumer behaviour
The Dutch people are probably the ones that like sales the most. It is one of their key characteristics. They like to get as much value as possible, for as little money as possible. Researchers say that it is part of the Dutch culture. Not only do they love cheap brand products, but they are also willing to give them up if they get a bit too expensive for their taste. People now even use apps where they plot the products they need per week and find the cheapest options possible where they can buy all the necessary products for that week. A few years ago, when apps were not as popular and life-defining as they are now, Dutch people spent 45 minutes per week on average looking for sales and reading through a great number of folders.
Dutch people spent 45 minutes per week on average looking for sales and reading through a great number of folders
What also is very stimulating for Dutch people, is to tell them that they have made a good deal. It occurred that firms abused this fact as well. In 2017, a lot of people complained that there was a Dutch company that first increased the original price of some products, followed by a (big) decrease in sales price. So, people thought that they were having a good deal, but instead, they had yet a negligible discount. Furthermore, in general, Dutch people, prefer short-term sales over long-term sales. So, when we return to the first dilemma in the introduction of the two packages, one with discount, but still more expensive and the one without. A lot of people probably would prefer the first option. Lots of people in the Netherlands are prone to take the discount, even though it is still not cheaper than the other option.
So, when you would tell them that a product is on discount for only one week, they would most likely prefer this product more than when the duration of the sale is around a month or even more. In the last case, we do not feel like it is a sale, but more like a structural lower price.
Times are changing
As said before, for a long time, we took care of our budget (and discounts), even when we had to spend almost an hour per week on it. However, times are changing. Nowadays, our lives become even busier and busier, so everything has to take less time. Often, this will go together with the sizeable increase in laptops, tablets and smartphones instead of books and notes. These electronic devices also have caused a shift in the way we look out for our sales.
The consumer behaviour has clearly shifted over the last decade
The consumer behaviour has clearly shifted over the last decade. As said before, where the average Dutch consumer used to spend about three-quarters of an hour on actively searching for discounts in the paper, people now have traded this unconsciously for almost always being on the lookout for discounts. This can be done while walking through the city, or in a much easier way by checking apps on your mobile phone. We can find an interesting and very recent example of this in the McDonalds app with its December month daily discount. People who have the McDonalds application on their phone receive a daily discount every day all the way through December.
This shift is noted, of course, by companies eager to exploit this. They, therefore, change their marketing strategies. Instead of having all discounts and advertisements all in one place where they know people spend their time actively searching for deals, they now try to make use of people’s constant unconscious awareness by throwing adds and discounts at you all the time. It is not surprising that the amount of discount sales has dramatically increased over the last decades. This is simply a way of the companies adapting to the new way of shopping. The words “SALE” and the word “DISCOUNT” often stand out and are used to grab the attention away from competitors.
Supply determines our needs
This changing market will have consequences for how we look for products. Our product priorities will no longer be based on our personal preferences, instead, we will simply look at the option that sounds the most beneficial. It does not necessarily have to be the cheapest option, but as we have seen before, most of the times it is the option with the most discount that appeals to customers. This trend, if continued, will make us turn to companies or brands that may not be overall cheaper, but to companies who have some large discounts. For example, the Dutch supermarket Jumbo has a policy where they usually have the lowest price per product. However, they still see a decline in customers when a large competitor holds a large sale, for example, the Albert Heijn. Multiple times a year they sell selected product for big sales, for example, during the “Hamsterweken”. After all, you have to pay less for the products than when you would buy them at Jumbo for the fixed lower price.
This changing market will have consequences for how we look for products
What does this mean for the future of our shopping habits?That is still uncertain. However, we can make a prediction based on this latest trend of being more and more focused on discount shopping. It does not look like this trend is going out of fashion any time soon. Companies have found a way of catching people’s attention by constantly having sales and they will not stop as long as they experience increased profits because of it. Whether this benefits or hurts the consumer remains to be seen. After all, time will sort it out.
Coen Wolters & Max Kanne 21-12-2017
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