Saturday, November 30, 2013

The dirty secret of Black Friday "discounts"

When shoppers head out in search of Black Friday bargains this week, they won't just be going to the mall, they'll be witnessing retail theater.

Stores will be pulling out the stops on deep discounts aimed at drawing customers into stores. But retail-industry veterans acknowledge that, in many cases, those bargains will be a carefully engineered illusion.

The common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.

The red cardigan sweater with the ruffled neck on sale for more than 40% off at $39.99 was never meant to sell at its $68 starting price. It was designed with the discount built in. Full story...

Related posts:
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  2. How advertising turned anti-consumerism into a secret weapon...
  3. Black Friday shopping rampage in the USA...
  4. The Good Consumer. Are you one?
  5. Chaos in Turkish store that bargained off...
  6. Russia: laptop sale, 80% off! But there are only 10 of them available... 

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