Technology feeds out discount price addiction12/10/2014
In 1963, when Andy Williams recorded “It’s the Most Wonderful Time of the Year,” he must have immediately recognized it was an instant holiday classic. What he couldn’t have known is, starting the day after Thanksgiving, his voice would come to fill every elevator, mall and superstore until the end of time. While I have never personally partaken in the shopping free-for-all that is Black Friday, I’ve always gotten a chuckle from the thought of Williams’ voice joyously ringing from Target’s PA system as enraged mothers battle over Nintendo DSs and My Little Pony figurines.
Thankfully, for those of us who have zero desire to camp out in front of Best Buy in late November, there is the Internet, and three days after Black Friday comes Cyber Monday. While Black Friday sales figures have started to decline over the last decade, Cyber Monday has grown by leaps and bounds. According to IBM, Cyber Monday 2014 sales grew by 8.5 percent over 2013, accounting for nearly $2.5 billion in online transactions. Walmart, the world’s biggest retailer, saw its single-day online sales record broken on Cyber Monday, with customers visiting more than 1.5 billion pages.
Americans love a good deal, and it’s the reason companies such as Gordmans and Kohl’s mark every item as “on sale.” It’s why the Sunday paper is five times as thick as any weekday edition, and why online retailers such as Amazon make a huge deal out of free shipping.
At no point was our collective desire to save a dollar greater than recent economic recession when deal-a-day websites started popping up. Sites such as Groupon and LivingSocial emerged, offering massive markdowns on everything from eating out to oil changes and concert tickets to exotic vacations. True to their name, deal-a-day sites present one reduced cost offer every morning that consumers can either purchase or pass on. Groupon became so popular, so fast, that Forbes’ wrote it was shaping up to reach “$1 billion in sales faster than any other business, ever.” LivingSocial, while not as popular as Groupon, has grown to have 70 million users.
Still, the problem with making deals so good they can’t be resisted is the company offering them almost always takes a lot of risk in balancing cost and return. While Groupon has incurred its own issues balancing the books, many retailers who’ve partnered with Groupon have ended up hurting their own bottom line. Many merchants have found that offering reduced price services through Groupon momentarily increases visibility but also establishes false expectations of cost for consumers. Making matters worse, revenue generated from Groupon offers is split between the merchant and Groupon, devaluing the transaction.
While the craze of deal-a-day websites has died down, consumers continue to hunt for bargains. Locally, one developer is hoping to meet this unending thirst with the smartphone application Klickle. Instead of one deal per day, users log on to the application, select businesses they’re interested in receiving offers from and can receive and redeem multiple offers at no cost. On the merchant side, Klickle allows retailers to set with their own prices and offers, launch them at any time of day, and instead of splitting revenue, Klickle requires merchants only pay a flat monthly fee.
Of course, if Klickle doesn’t rise to the ranks of Groupon or LivingSocial, some tech craze will. If Cyber Monday’s pandemic-like rise has proven anything, it’s that the American consumer’s loyalty to shopping experience is ever fleeting. Just as online retail has impinged storefronts across America, the convenience of clicking a mouse will one day trump the terror of Black Friday. CV
Patrick Boberg is a central Iowa creative media specialist. Follow him on Twitter @PatBoBomb.