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The Oldest Retail Disease is RTD.
There is an area of the brain called the ‘nucleus accumbens’ – or to use the plain English version, the craving spot. This is the spot that literally ‘lights up’ when (for instance a smoker feels the craving to light up.)
Most people would know that intuitively or believe me when I tell you. But here is the killer.
When stimulated, this area requires higher and higher doses to gets its fix. That also makes sense, right? [As matter of interest, Lindstrom (2008) has published research that shockingly reveals that the graphic images on cigarette packs actually stimulate the craving for the next smoke!]
Discounting is the drug of choice for most retailers.
But here is something worth thinking about: the pleasure derived from bagging a bargain is also an addiction that requires higher and higher doses in order to satisfy the consumers’ cravings. Consumers develop RTD – Resistance to Discounting.
And this puts most retailers on a downward spiral of ever-increasing discounts. Which leads to….?
Maybe we should take our medicine and star weaning the customers from that addiction? Start adding value rather than simply buying tomorrow’s sales with cheap discounts. (There is a time and place for discounts, and definitely room for sales promotions. But it does not always have to be 30% off.) Discounting may become the superbug that will one day resist all forms of antibiotic.
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