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Only tangentially related - one big hardware store chain in Germany ran bankrupt because they started to frequently ran „20% on everything“ marketing activities

Only tangentially related - one big hardware store chain in Germany ran bankrupt because they started to frequently ran „20% on everything“ marketing activities. The idea was to attract customers who would return when one activity ended, but the result was the opposite: the extra customers only came for the 20% and didn’t return between the activities, and the loyal customers started avoiding the chain and waited for the next program to start.

standardUser 3y ago
In the US we had Bed, Bath and Beyond which was famous for it's ubiquitous 20% off coupons. I'm not sure if their failure had anything to do with the coupons, but many people, myself included, only went there with the specific intention of using that coupon. They were bought by Overstock and all the stores were shut down.
- jawns 3y ago
  Those 20% off coupons allowed them to price an $80 item at $100. If the customer has a coupon, they get that item for as low as the store is willing to sell it for -- which works out to be market price. But if they lack a coupon, they're likely paying above-market price, and that's extra revenue for the store! Granted, this is an oversimplification, because many people might decide not to buy the item at a perceived above-market price. But I think, in general, coupons work. JCPenney famously got rid of coupons in 2012, and the customer outcry and effect on its stock price forced them to restore them soon after.
switch007 3y ago
That's pretty tragic. Did nobody realise that hardware purchases are infrequent?
- pflenker 3y ago
  It’s even worse - those who frequently buy hardware are small one-person companies who drive from building to building gig. They are very cost conscious and very mobile , so they are the most likely candidates to buy bigger quantities whenever the price is right. They for sure are not loyal to any brand.

standardUser 3y ago

In the US we had Bed, Bath and Beyond which was famous for it's ubiquitous 20% off coupons. I'm not sure if their failure had anything to do with the coupons, but many people, myself included, only went there with the specific intention of using that coupon. They were bought by Overstock and all the stores were shut down.

jawns 3y ago
Those 20% off coupons allowed them to price an $80 item at $100. If the customer has a coupon, they get that item for as low as the store is willing to sell it for -- which works out to be market price. But if they lack a coupon, they're likely paying above-market price, and that's extra revenue for the store! Granted, this is an oversimplification, because many people might decide not to buy the item at a perceived above-market price. But I think, in general, coupons work. JCPenney famously got rid of coupons in 2012, and the customer outcry and effect on its stock price forced them to restore them soon after.

switch007 3y ago

That's pretty tragic. Did nobody realise that hardware purchases are infrequent?

pflenker 3y ago
It’s even worse - those who frequently buy hardware are small one-person companies who drive from building to building gig. They are very cost conscious and very mobile , so they are the most likely candidates to buy bigger quantities whenever the price is right. They for sure are not loyal to any brand.