It’s a simple concept really – everything for £1. Discount stores are becoming increasingly recognised, broadening their appeal to even the richest AB demographic. How exactly can a store offering products at just a pound continue to profit?
Although today pound shops are still known to sell some unusual products, the similarities to any other conventional supermarket is ever growing. Aisles are arranged in a logical order, food and drink to go are available in the nearby fridge, seasonal specials change as in other stores and well known branded products are piled high throughout.
‘It’s only a pound’
When the price is merely a pound, we feel confident in the price and in control of our purchases. You pick up 5 items so know you’ve spent five pounds.
Entering discount shops creates an environment of cheapness, shoppers flock through the doors into an area where everything seems affordable and relax knowing they can afford anything. Studies have shown this triggers chemicals in the brain that create a happy feeling, in turn they are more likely to spend more.
The Perfect Illusion?
It’s virtually impossible to walk through a pound shop without seeing offer after offer. The packaging itself screams a bargain. Get an extra chocolate bar in this pack for free or 50 percent more in this bottle – all to create an illusion of a big saving. Although you may only go in for one item, the vast offers can trigger costly additions to the planned budget. In fact, nearly a third of sales in pound shops come from impulsive buys.
Putting well known branded products at the front of the store creates a feeling of trust and encourages shoppers to enter. It’s almost like they’re entering a normal supermarket, just cheaper. However, as shoppers find themselves deeper in the shop, products found are often “phantom brands” – essentially own-brand products that do not feature the discounters name. Through phantom brands, the discounter avoids potential negative assumptions over quality and adds to the impression of getting a brand at a bargain.
More for Less or Less for More?
Although we feel like we’re getting a great deal, this isn’t always the case. Remember discounters have their own special pack sizes which could see you getting less for your money. That’s not to say pound shops are intentionally misleading shoppers, the size is clearly printed on its products. Nevertheless, shoppers often don’t realise they are buying a smaller version and unwittingly pay more for less.
The pricing strategy to ‘Pile ’em high, sell ’em cheap’ has made its mark in discount retailers everywhere. Consumers spend more than they plan to, impulsively grabbing what they consider to be a bargain. While the one bargain you may set out for is offset by the 7 other items you pick up, discounters are still increasing in profit and continuing to grow ever more popular with shoppers.