Chapter 89

Retail Psychology

Ruth: John, I’ve been meaning to speak to you about something that’s troubled me since I began working here.

John: No time like the present, Ruth. Fire away.

Ruth: I hope you’re not going to bite my head off, but I’m puzzled by the way you operate this shop.

John: Why?

Ruth: What I mean is that I’ve been with you for five months now. I’ve worked in two other health food stores, but as far as I know, your method of doing business is unique.

John: How?

Ruth: Well, in my time here, you’ve put on two special offers and now you intend to introduce another.

John: Right. So what?

Ruth: My point is that on both previous occasions, you made sure we didn’t have any of the items supposedly on special offer, and now you’re going to do that again. I’m baffled. How do you expect to sell the stuff in question when we’re out of stock of it?

John: Obviously I don’t expect to sell it. This seems to be an aspect of retail psychology you need to grasp, Ruth.

Ruth: Would you care to explain?

John: Certainly. You must have noticed that I announce the offers loud and clear, and stress that they are available for only two days. The resulting footfall here in those short periods is much higher than at other times.

Ruth: I understand that, but some people leave disappointed and empty-handed when they see that the special offer shelves are empty.

John: Indeed they do, but many of them reason that while they’re here anyway, they might as well stay and buy other things at normal prices. Now, if you just go over our sales figures for the two-day periods in question, you’ll find that daily receipts are on average over a third higher than at other times. All those takings relate to stuff sold at full prices, which means that we’re selling goods at top margins all the time.

Ruth: But we get complaints.

John: I know that a few people squawk, but most shoppers are pretty fatalistic. They either buy something else or just leave. Anyway, my assessment, based on experience, is that the gripers are usually those who come only to nose around for bargains, and who needs them?

Ruth: I see what you mean. Do you ever have any genuine special offers?

John: Oh, about once a year I dispose of things I want to jettison anyway. That doesn’t cost much and gets rid of clutter.

Ruth: Don’t you feel that your technique is a wee bit questionable?

John: You might look at it that way, but I prefer to think of it as making a good profit. That’s why I could employ you. Get used to it, Ruth.