Mirage of End-of-Season Sale

It's a Happy New Year!

With the beginning of the new year, this is also the time for end-of-season sales. Like every year, you will get to see those big numbers go up on the display with a red background. Yay! It's SALE time.😍

I bet most of you must be waiting for this time. Well, why wouldn't you? It's the time of year when many people go on their long-postponed shopping spree. This is the time when big brands are putting up their merchandise at lower prices and who doesn't like a good bargain?

Recently, I went up to my nearby mall to look at the glittering lights set up as part of the new year decoration. After savoring the moment, I went inside to look around and yes, these end-of-season discount posters were everywhere I looked at. What better time to have a huge footfall when the discount season is up and coincidently colliding with festive time? Is that really a coincident?

Take a look at the stores like Shopper Stop, Pantaloons or Lifestyle near you. People rush in like a swarm of bees, being attracted to these multi-brand retail stores. However, it really is a good opportunity to buy good clothes at a lower price. I might get a pair of jeans only for Rs. 1000 during the sale, which otherwise would have cost around Rs. 2500. During the sale, you could get a professional suit for somewhere around Rs. 3000, which during the off-sale season, would not go below Rs. 5000. This measure is usually termed as Consumer surplus. A lot of big brands positions themselves as a premium brand but during the sale season, customers pay less for the merchandise than the usual, thus experiencing satisfaction and benefits from the brand.

Although this Sale season is a good opportunity for the consumers, it is also something that every retailer should and has to do. The end-of-season sale is a time for retailers to clear their old stock and don a fresh look to welcome the new fashion. It gives an opportunity to attract new and repeat customers. It is highly recommended for retailers to take these sales seriously and create a good shopping experience for their customers. As this is the time when new customers would come in to give a try but if they feel it is too much of a hassle to shop during this critical time, the company is likely to lose its potential customers. But, if things go well for them, it does give a boost to their reputation as people share their experience, be it good or bad, making the word-of-mouth promotion critical for them.

FOMO or the fear of missing out on a lucrative deal has been an effective way to boost sales. Among us Millenials and Generation Z, peer pressure is something which has stood out for long and when we see our friends shopping during these sales, many of us also want to go out shopping and spend money. Besides that, we are also the victim of the Virtual Income Effect, which creates an illusion of an increase in our disposable income than during the off-discount period. However, this trigger makes us go to those shopping malls and increase footfalls for the retailers. Recently, the Economic Times also wrote an article on the illusion of sales.

A lot of brands intimidate customers with their high price points, which look unattainable to us, customers. But, it's the Sale season, when the price fades away and the intimidation becomes a positive brand attitude towards them. We rush in to buy the things which we usually don't. Savings is something that had been ingrained in us Indians. I bet many of us must have heard stories of our grandmas, how they used to hide away some money in different places which could be used during the time of urgency. With the changing behavior among people, we are saving less than the generation before we used to. However, when we go out shopping, we do not look for the cheapest but something which will be the best bargain for us.

On one side, the retailers are trying to attract customers to buy more which would impact their top line and on the other customers strive to find a better deal, saving big bucks in the process, or buying more for less. The story of the end-of-season sale does seem to look like a Win-Win situation for both retailers and customers. But, Is the urgency of limited-time sale creating a disruption in our budget and leading us to buy more than we need? I believe this is something that we have to think of ourselves.