JACK, I WON’T CUT SOME SLACK

The apparel industry has been very ingenious in tempting shoppers by varied discounts. The Jack & Jones store at the Pheonix Mall in Mumbai was availing a discount of Rs. 1000 on a purchase worth Rs. 5000 (and above) and also that of Rs. 2500 on a purchase worth Rs. 12500 (and above) – fair deal. (Also if purchase amount exceeded 18500, the discount totalled Rs. 3500 – the one we irrationally opted for. Let’s see why)

Converted to percentage terms, the former is a discount of about 16% and latter is that of 20%. Since no piece of cloth was exempted from the discount, the apparent reason that the company did not offer a flat sale was that the reduction in margin be offset by the increase in sales – so far so fair. The catch lies in realizing the huge change in preferences.

STAGE 1

Bill shops clothes worth 4000. But then he finds that if he buys that white tee worth a 2500, his total bill would be 5500 and not 6500. Hence the white tee comes to him at the cost of 1500 and not 2500 – a whopping 40% lower in price! Thus the last piece (the trigger) of cloth comes at a higher discount than the original discount i.e. that of Rs. 1000 on a bill of Rs. 6500 which equals 15.3%. And never does the bill amount comes to an exact 5000 which means the discount percentage is mostly below the original 16% and 20%.

STAGE 2

If the bill touches like 7500 or 8000 – say 8000 for now, soon Bill faces another trigger to go for the next level. He buys that red leather jacket worth 5500 which brings the discounted bill to 11,000 and the discounted percentage to 18.5%. This time the jacket (the last piece) came to him (seemingly) at a discount percentage of 45% i.e. at a price of 3000 rather than 5500.

What we see here is that even though he did not wanted to buy the jacket or did not need it, he was tempted to buy it and the shop was successful at making an earlier improbable sale.

STAGE 3

This is a stage which very few ‘deliberately’ try to cross – the discount of 3500 (1000 + 2500) on a bill of 18,500 (6000 + 12,500). Even in the first place, Bill failed to learn that the discount percentage on average here is 18.9% which is still lower than that of the stage 2 (20%) discount. Also if the bill touches somewhere between 15,000 and 17,500, he’s again trapped by the luxury of buying that last piece.

SO WHAT SHOULD WE DO?

You might argue that the last piece is a buffer stock and clothes anyways don’t go in vain then trust me they do (at least a little less than often) – a piece that you buy in extra will either replace a piece that you wear often or die in the almira, given the constant number of clothes that remain in routine use (think it out). You might also argue that even a 16% discount on average is a fair deal;even if you need to buy an extra piece, why not? But then you did not want to buy it in the first place. So in search of a discount of Rs. 1000, you bought an extra piece for 1000 when in fact you didn’t need it.

So when dealing with Jack, better not cut some slack!

 

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