‘Tis the season for consumers’ holiday dollars, and retailers know that it’s the sales that lure customers in, but are Black Friday deals really deals?
“The American consumer likes to feel like they’re out there getting a deal,” said Hitha Prabhakar, chief research officer at AitchPe Retail Advisory.
When J.C. Penney briefly did away with discounts in January 2012 — and introduced a new “Fair and Square” pricing strategy — customers fled and CEO Ron Johnson was eventually forced out.
The number of deals offered by 31 major department stores and apparel retailers increased 63 percent between 2009 and 2012, and the average discount jumped to 36 percent from 25 percent, according to Savings.com, which tracks online coupons.
But the Black Friday secret some stores do not want customers to know: They may not be getting the deal they think they are.
“Stores set their prices so that when they do discount, they can still make a profit,” Prabhakar said. “That whole pricing system where they mark up their products just so they can discount is [built] into their business model.”
Prabhakar and other retail insiders shared these tips:
1. The 30 percent rule. As a general rule of thumb, shoppers should look for discounts at 30 percent or more. Most stores expect to sell items at 30 percent off, so look for discounts higher than that — those are the real deals.
2. Track prices. Sites likes Camelcamelcamel let consumers follow an item over time.
3. Don’t settle. If you think you’ve got a dud, go back and get a price adjustment. Most big retailers will match competitors’ prices.