Personal Spend — A Dearth of Trust & Visibility

It would seem that the current practice of enhancing spend visibility and price benchmarking wherever possible in the corporate arena has been slow to permeate consumer consciousness. While we are all seeking to save a buck on everything we buy, the manner by which we pursue this effort is, for the most part, lacking a cohesive strategy. Many retail merchants, on the other hand, are going to great lengths to exploit our naivety. Yesterday's Wall Street Journal published an account of how a rug dealer in Dallas Texas applied his knowledge of how American's buy to the extreme.

In the article "In Texas, There's No Business Like 'Going Out of Business'" the WSJ reported that "When Cyrus Hassankola moved to Dallas a couple of years ago, after successfully going out of business in several locales, he decided to settle down and go out of business permanently ... Customers rooting through the stacks of oriental rugs in the store he opened on a busy road in North Dallas would sometimes say how sorry they were that he was going out of business. 'We're not,' Mr. Hassankola told them. 'It's just the name of the store'." Thanks to the Texas Attorney General's office "Mr. Hassankola -- for a limited time only -- has stopped going out of business".

Retailers everywhere are spoofing customers with false discounts by advertising slogans like "50-80% off price" and the old standby "Everything Must Go". Consumers for their part are also eschewing price tags and attempting to haggle. The Journal quotes "America's Research Group, a South Carolina pollster, says 72% of 1,000 consumers interviewed in February have haggled in the past year (31% is the historical average) and they've gotten deals 80% of the time; last year, only half the retailers they took a shot at caved in."

While many disingenuous retail pricing practices quickly become transparent, the retailers retain the upper hand. To paraphrase The Journal's description of "bazaars from Delhi to Marrakech ... it's the sellers who always know where a [product] comes from, how old it is, how good it is, and how much it cost them".

Just as a lack of supplier and buyer transparency breeds mistrust in the corporate world, the problem seems much worse between retailers and consumers. Wouldn't it be interesting if more retailers tagged their merchandise at average marginal cost and invited bids at check-out? It would take more time, but that would just be another way to share the cost of merchandizing and become better educated, more trusting consumers in the bargain.

William Busch

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