Over the last several months, too many of us have watched our 401(k)'s, IRA's, and other stock-market-driven portfolios suffer more than ever before. In a blink, American shopping habits changed from 'fashionista' to 'recessionista'.
First, let me say that I think this was a needed change for our impulsive American society who did not 'save' very well compared to other countries around the world. We needed a kick in the pants to remind us that 'all things in moderation' is a very good approach to life. Unfortunately, instead of becoming more 'moderate' in our spending habits, many Americans just stopped cold turkey. (See
5/19 blog about Suze Orman on Oprah)
This abrupt mindset shift about spending money was understandably challenging for retailers, as this business
depends on the co-mingled 'desire to shop' and 'shopping desires' of the American consumers to survive and thrive.
So... how to react?
Larger retailers saw the iceberg, but the boat was so big they couldn't turn around. Their orders with major suppliers were already on the way or couldn't be stopped. So, they went on sale, and the months-long span of deep-deep-DEEP discounting, starting with the pre-Christmas season, began.
Soon thereafter, all media began preaching Discount! Haggle! Sale! They went (and still go) so far as to say that you're a fool if you do NOT ask for a discount.
Hmmm... Let's think about where that will lead. If larger retailers KNOW the consumer will expect a deep, deep discount, they'll just start making the first price higher so that they can give you a deeper discount. Or, to leave the prices the same, they'll make the product a lower and lower quality so that they pay less up front. (If you don't think this is how it works with the 'big guys', I'm sorry to burst the bubble, but it's true.)
What's the alternative?
Talk about VALUE. SERVICE. and the SHOPPING EXPERIENCE.
and
Talk about the INVESTMENT the consumer is making in the product.
I love a good sale as much as the next person, and, yes, I've been known to brag about getting a great 'deal' on a pair of clearance shoes.
I also shop for value.
Here are two pieces of advice I learned from my mom:
1. just because it's on sale, doesn't mean it's a good value.
2. Think about the item: if you wanted or needed it
before you learned it was on sale, then go for it! If you are acting impulsively, use only discretionary income and realize there may be no value in what you are buying.
One more guideline that I try to follow when shopping:
Price per UseThere have been a lot of money saving ideas thrown out to the public lately. For instance, you can buy lunch each day for $7 per day (almost $50/week), or you can make your lunch for 5 days ... for about the same $7. Makes sense (and saves cents). (and makes splurging one or two days a week not feel so bad!)
Let's use Price Per Use in a retail example>
Suppose you find this amazing avocado green leather jacket that reminds you of something the
Mod Squad would have worn: sleek, sexy, and a blast to the early 1970's. It was originally priced at $450 and is now reduced to $99. A steal, right? So you buy it. Well... the first time you wear it out in public, you realize that looking like you're from 1973 may not be the look you're going for. Your friends give you a hard time, so when you get home, the coat goes to the back of your closet until you finally fish it out on a Goodwill purge day.
What did this coat cost per use? $99.00
Now, suppose you save for a bit, and buy a current but classic brown leather jacket for $450, and find an avocado green scarf on sale for $15. The coat lasts you 10 years and you wear it every season, October through March. You get lots of compliments. Now your price per use is $45 per year, $7.50 per month... wear it 5 days/week, and that's down to less than 40cents per use. A BIG difference.
The same thing works when shopping for furniture.
You walk into a furniture store and see a beautiful sofa. It's $1500. Wow. From all the ads you've seen in the newspaper, you thought sofas were supposed to be $499. You allow (yes, allow, because that's what consumers do) the salesperson to approach because you want to know what makes this sofa special. Turns out it is
made in the USA (I can betcha the $499 sofa was not). You also find out that the cushion core is soy mixed with foam: a much
'greener' product. You like that. The frame is
solid wood. You can choose from over 75 fabrics. And your salesperson has just offered to create a plan of your room, for free! You buy the sofa, and enjoy it in your home every day for
10 years, and the only reason you get rid of it then is because it has been so well loved by the dog and the kids.
That's a $1500 sofa, used and enjoyed for 10 years.
Price per use: $150 per year; $12.50 per month, about 40cents per day!
The $499 sofa may only last you about 3 years before the cushions break down and the cover fades... making its price per use $166/year... about 45cents/day... which doesn't sound like much of a difference, except that you'll have to buy
ANOTHER sofa at the end of those 3 years... hmmm. It really is true that you 'get what you pay for.'
Enough soapboxing, and I hope this wasn't too preachy.
Sometimes just bringing a little perspective can help people understand that the most important decision that goes into buying furniture should not be "how much will I save?!" or "did I get the cheapest one out there?!"
Along with "do I like it and want it in my house?", the question should be "does the combination of the service I am receiving plus the long term value of this product warrant its price tag?" That is how LaDiff hopes you invest in furniture. Sure, we want you to have fun and be impulsive, too, but when it comes to the serious stuff, like where your family sits, sleeps, and eats, we think
value is a pretty important part of that decision.
