- Bargain Fever – How to Shop in a Discounted World
- by Mark Ellwood
- Publisher – Portfolio / Penguin
- Copyright 2013
- 235 pages
Rating (for entire book) – 8 out of 10
I finished up Bargain Fever over the extended weekend. It’s a good book, but too often it devolves into anecdotes. These anecdotes are good, but that doesn’t mean that they provide the reader with useful information. Still, it’s pretty good.
Chapter 4 – How the Other Half Saves (finished pages 95-116; chapter ends on p. 85-116)
This section – which I’d already started – delves into the lengths to which fashionistas will to get deals on apparel from their favorite designers. Readers get to learn about a world that they probably know little about. One person describes Manolo Blahnik’s exclusive sale as follows “It’s tables in all sizes, lots of Russians and a big bunch of black drag queens” (p. 97). My mind boggles trying to conjure the visual. Unfortunately, I thought that the material dragged on a bit too long.
Chapter 5 – “Let’s Make a Deal” (pp. 117-144)
For my money, this was the weakest chapter in the book. This is especially regrettable because it contains Ellwood’s main point; he claims that the business world is transforming to “…the new all-haggle model that every retailers will soon have to adopt” (p. 133). He doesn’t provide sufficient support for such a sweeping contention. Yes, people haggle for things for which they didn’t use to haggle. But you can’t go farther than that.
Ellwood examines Groupon’s successes and failures and what they reveal about contemporary business. He also examines a industry that he claims has successfully made the transition to the new business norms (hotels) and an industry that has not (airlines). In regard to airlines, Ellwood quotes branding expert Al Ries who says that airlines tell their passengers that they are either cheapskates (if they’re in coach) or stupid (if they’re willing to pay for upgrades). The passenger gets to choose between bad and worse.
Chapter 6 – Discountphobia (pp. 145-176)
Here Ellwood discusses businesses that have managed to avoid marking down their merchandise. He cites for examples – American Girl dolls (which my daughters love), Apple. Louis Vuitton, and Nespresso. He claims that four principles underlie their ability to hold the line on discounts –
- Small, tightly-controlled product lines (to avoid excess inventory that must be marked down).
- Tight control of distribution (to prevent comparison shopping)
- Great retail atmosphere
- connection with the brand because of it what the consumer thinks that it says about him or her
Ellwood also has a nice section on JCPenney’s unsuccessful attempt to wean it’s customers from their addiction to sales, which shows why the discount habit can be hard to break.
Chapter 7 – The World On Sale (pp. 177-202)
There’s one great point in Chapter Seven, but the rest of the material seems “padded out.” Ellwood discusses the research of Sarah Maxwell of Fordham University. Maxwell wanted to know why some societies haggle and others do not. She found that societies could be 1) highly individualistic (e.g., the U.S.) or highly collectivist (e.g., Brazil or India).
She found that in individualistic societies, people tend to think that everyone should have the same “choices and chances.” Therefore, people should pay the same price for the same item, not haggle. But in collectivist cultures, people “consider themselves first part of a given peer group, which is then a subset of society…” (p. 181). Therefore, “An Indian shopper didn’t consider everyone browsing next to her a peer. Hiking to cost for an upper-class neighbor, Maxwell found, was seen as fair” (p. 181).
The rest of the chapter isn’t nearly as good. Ellwood takes the reader on tours of various countries around the world (China, Japan, Turkey, the United Kingdom) and discusses the attitude toward haggling in each.
Chapter 8 – The Future of Bargain Fever (pp. 203-232)
Ellwood lists four trends that he says will dominate bargaining in the future –
- showrooming – where consumers use technology (such as smartphones) to comparison shop for items that they see in stores. Ellwood says that showrooming will force businesses to develop more store brands. He notes that Macy’s and Kohl’s store brands make up about 40 percent of their sales.
- cheap or choosy – consumers will have to decide whether it is more important to save money or to get what they want
- negotiation – negotiation is here to stay. Consumers are becoming better negotiators
- dynamic pricing – businesses increasingly will find ways to shift prices with changes in demand and based on customers’ individual characteristics. (This one scared me a bit.
My Final Offer
I feel like a bit of an ingrate, complaining so much about a book that I’m giving an 8 out of 10. Have no doubt, Bargain Fever is a good read – even if Ellwood couldn’t quite sustain the momentum that he built in the first 100 pages.