These single-price discount retailers all work on a simple premise where nearly everything costs £1 (or 99p) and the goods are bulk-bought cheaply and stacked high. To be successful, the shops must shift large volumes of stock, and it seems that they are doing just that.
How many times have you popped in for “just one thing” and left with a basket full of goods.
I often take my five-year-old daughter in to our local shop, so she can spend her pocket money. From my point of view, it’s easy as I don’t have to keep telling her that something is more expensive than her £1 budget – everything is a pound afterall – and she feels like she is living the dream as she can “buy ANYTHING!”. It’s a parenting win/win situation.
But what is it about the fixed-price shops that keeps people coming back again and again?
Do these shops offer decent bargains or are consumers simply being duped into buying poor-quality products because after all, it’s “only a quid”?
It turns out that there a science behind why we spend there – here are a few ways that the pound shops get us to hand over our cash. By knowing these tricks of consumer psychology mean that you can get the most value for your money.
What’s more, you can find my new post about top five tips for bagging a bargain at pound stores over here.
1 DON’T BE FOOLED BY THE FIXED PRICES
From a retailer’s point of view, having a consistent price makes financial sense; you don’t need to pay staff to price the stock and it can move straight from the warehouse shop floor. But it’s the simple branding concept – everything for a £1 – that gets shoppers through the door in droves
This creates an ‘environment of cheapness’ where shoppers feel more relaxed because everything now seems affordable.
According to consumer psychologists this triggers chemicals in the brain which create a feeling of happiness causing shoppers to spend more. As a result, nearly a third of sales are impulse buys. Amen to that.
2 PHANTOM BRANDS GIVE PERCEPTION OF BETTER VALUE
Retail experts suggest that the location of well-known brands at the front of a pound store gives shoppers the impression that it’s just like a normal supermarket – although, significantly cheaper – and this is what lures you in.
Seeing these familiar brands instils a sense of trust and encourages consumers to come inside. Although, once through the door, you’ll see a larger proportion of products on sale are own-brand products without the pound shop’s name.
By using a “phantom brand”, the retailer avoids any potential negative assumptions about the quality -and further adds to the impression of a wide variety of brands on offer.
3 OFFERS THAT ARE HARD TO PASS UP
Everyone is enticed by a good deal; we see a great price and we think we better snatch it up before it runs out.
The thing is, many pound shops are crafty and give customers the impression that they are getting a good deal when the fact is, that they are getting less for their money.
For instance, many pound shops frequently convince companies to sell their product in odd-sized packages to keep the retail price under £1. But while the contents of the package are reduced, the box or bag holding the products appears the same size – therefore giving the perception of equal, or better, value. So, while the big supermarkets will sell crisps in multipacks of six or 12, for instance, at Poundland they are packs of five.
Always cast a careful eye over the packaging before you toss that “bargain” in your basket.
4 BARGAIN! BARGAIN! BARGAIN!
It is virtually impossible to walk through a pound shop without having offers jump off the packages on the shelves: a bottle of bleach boasts “50% more” while a three pack of Toffee Crisp bars claims you get an extra for free – creating the illusion of a bigger saving.
Consumer psychologists found that bargains and offers cause a biological change in most shoppers’ brains that triggers a positive reaction – and it’s very difficult to pass up. So, ask yourself: “Is this really that good a deal?” before you hand over a penny.