The thrill of the hunt
Online high-end shopping sites can throw the sage shopper off his or her game.
I have a favorite, although rather obscure, Monty Python sketch. An older housewife type (a "pepperpot") sits on a park bench. Another approaches dragging a car engine on a cart, saying she's been shopping.
"Did you buy anything?" asks the first.
"A piston engine!"
"What d’you buy that for?"
"Oooh! It was a bargain."
It's not their most memorable bit. But it deftly sums up a way in which we can short-circuit our own thinking when we shop.
- Bing: Best of Monty Python
As I've written here several times, when we shop we are not creatures of cold calculation. We can't be. There are just too many choices at the mall and not enough time to find the one optimal allocation of our money over everything we could buy. Instead, we operate on a set of learned behaviors that approximate the optimal outcome. One of those is bargain hunting.
Bargain hunting not only saves money, but for most of us it is satisfying fun. Which is what makes it dangerous. There is something uniquely delightful about scoring an item for less than it should cost, that is, for less than it is worth.
If you didn’t know better, you might think that the greatest achievement in bargain hunting would be to find exactly what you were looking for at a great price. That’s certainly a good thing, but as shopping thrills go it is inferior to spotting a great deal on something you weren’t intending to buy. Discovering that the sweater you went to the store to buy is 50% off is passive. It is merely found money, like receiving a gift. But noticing that the gloves are 80% off and snagging the last pair is an active achievement. You are better off because you are a wily and decisive consumer. And that’s a rush.
I was reminded of this phenomenon by a recent New York Times Magazine article on online off-price retailers of luxury goods. That discounters of high-end apparel and accessories are doing well just now shouldn't be much of a story. Recessions, particularly the first year of them, are usually the best of times for outfits that clear out the inventory of other retailers.
It's not that folks are that much more interested in a bargain in recessions. (There's no shortage of people interested in the thrill of buying good stuff cheap even in the best of times.) What makes the early days of recessions great for these companies is the generous supply of stuff to sell. Retailers and manufacturers of high-end merchandise start recessions stuck with a lot of stuff they ordered the year before when times were better.
But that’s not what the Times story is about. The three e-tailers discussed use a lot of theater in how they sell their goods. They induce a sense of artificial scarcity with "time limits and unpredictable and quickly rotating supplies." And they build up a sense of "exclusivity" by being "invitation-only" and not allowing the sites to be indexed by search engines. You gotta know somebody.
Of course, exclusivity is all relative. The sites have about 1.5 million members each. Getting in without an invitation requires spending an arduous day or two on a waiting list. But the theatrics apparently work. There are only two Dolce & Gabbana shorts at $278 left and you're lucky to even know about it and you better hurry up and buy them right now!
What makes these sites effective, and dangerous to the consumer, is that they artificially create the feeling of scoring a great bargain without (necessarily) offering any great bargains. That's not exactly a first in the world of salesmanship, but the new format may be enough to throw the normally sage shopper off his or her game. So proceed with caution. This is where piston engines come from.
Related reading at Bad Money Advice:
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