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Price has been an important factor in buying decisions ever since the recession in 2008. However, selling solely on price has large disadvantages for merchants, not the least of which is reduced profits. This year, merchants have taken to offering huge deals early and often in a bid to get shoppers into their stores. That strategy has paid off in more sales, but now consumers are starting to expect these deals and are becoming resistant to paying full price.

Finding the Best Deal

Consumers are now almost hardwired to look for the best deal. They’ve pulled out all the stops from camping out at their favorite stores the night before a Black Friday sale to using cell phones to compare prices before actually making a purchase in-store. Stores have gotten very creative at generating consumer interest, but it almost always has to be attached to a very, very, low price. However, shoppers have become so used to being bombarded with the latest deal that many are yawning or suggesting that the deals are all hype. Marketers are now wondering whether all these sales are making the customer more resistant to buying and not less.

Don’t Compete on Price Alone

It’s an old adage that the business that competes on price loses. The reason is simple: The business will end up pricing their profits away. In order to have a successful business one must be able to sell, but at a price that creates income for the business. Bargain pricing is a temporary strategy to generate interest, but done too often it can have the opposite effect: Very high consumer expectations for a very, low, price. Some companies can work with that mode, like Wal-Mart. Others will find they just can’t compete on price alone. It’s often useful to consider several different ways to market that appeal to consumers, and some of them don’t have to break your bank.

Fun and Games

Social networking has been a new way to reach consumers and offers some ability to generate interest for your products without necessarily having to use price as a bargaining chip. Creative retailers are learning that consumers like to have fun while shopping, even when it is done online. They offer online contests, talent competitions, and yes deals galore. They have even let you shop for others and use your social networking account to send notice of a gift to their Facebook page to help them get more views and market others in a manner that is not seen as intrusive.

Recession Pricing

Marketers will continue to offer 50 percent off deals to get people into stores as the economy continues to stagnate. Job losses mean that price will continue to be a very important factor when people are out shopping; however, even unbelievable deals are meeting with some resistance. Consumers have a heightened expectation with some suggesting that the prices were better a year ago. Even if that is not true, the perception is that a deal can always be better. However, merchants just want to make the sale this year and avoid a repeat of year’s past when holiday spending was down. They’ll forgive a shopper their bad memory and continue to offer bargain basement prices until that strategy stops working. For now, sales tallies on Black Friday suggest the strategy is working and more people are buying, with sales being sales being up 16 percent so far when compared to the same time last year.