What you don’t know about supermarkets

You are a smart consumer. To avoid the crowded supermarket in the heat you went to a supermarket at an ‘unpopular’ hour. You find all the things on your list immediately and the newest in the ever growing line of Cadbury’s chocolates (You really can’t go wrong with those). 
Sadly, the supermarket owner did account for this beforehand. What they may not want you to know is that, every item in that supermarket is placed at its designated spot after careful planning. As much as a consumer would like to believe they are hawkeye, everything that catches your eye is meant to.
When you enter any store, it has some scarcity power (it can charge you a higher price to some degree) simply because it takes an effort to walk to the next store. Based on this, firms discriminate in terms of prices (Charging different prices to different groups). Ideally, they would want to charge each consumer the maximum she is willing to pay. Amazon did try this (and makemytrip does this in India). Their claim was to try to ‘personalize’ your experience which meant charging you a higher price for a repeatedly viewed product or service. Now, that is frowned upon and Amazon after much backlash decided to stop doing that. So they decided to turn to discriminating based on different groups instead of individuals, which apparently is not socially frowned upon. Consider the Big bazaar card, a popular loyalty program of an Indian super market: By providing you ‘points’ which get you a discount on your next purchase, they get to know your buying patterns and all but ensure that you will visit their store again to redeem said points.
You (okay, maybe not you) are lazy. Firms know that, they know you will never bend down to get something from the bottom shelf in a crowded supermarket if you can see it at eye-level. So isn’t it a happy coincidence that only the expensive products are kept at eye-level?
Sometimes, even necessities can be exploited. A recent boom in the organic foods industry has caused a sudden spike in their demand. Any major supermarket will provide you with an array of those organic foods. Customers often miss out HOW they are placed. Organic foods are typically together and it is claimed to be for convenience, somehow organic eggs are never with ‘normal’ eggs. The price difference is too humbling. 
You may think those ‘nice’ stores that give student discounts and senior citizen discounts are truly altruistic but sadly they are not. It is generally good business to give those discounts. Only a cynic (or an economist) would argue otherwise. However, the important question here is how much sales rise when prices are dropped.
That leaves us with restaurants and movie theaters. It is no secret that they are kings at price discrimination. That has gotten to the extent that people expect to be charged more at restaurants and they presumably they do not want to appear thrifty since a considerable amount of people here are on dates. 
So how does all this information help you in becoming a smarter consumer? In order to get a bargain shop cheaply and look for alternatives before making a purchase. If you want to outwit the supermarkets then simple observation is your best tool, similar products are often priced similarly and just need to found (presumably from the annoying bottom shelf).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: