Streaming Buyers With Bad Weather

Feb 21, 2015

 

Bad weather can be used as a hurdle to selectively discount to those that are serious about saving and unlikely to purchase otherwise.

 

One part of a larger price discrimination strategy involves discounting only when necessary. It's ok to discount a sale to a value-conscious consumer as long as the sale is still profitable, and it's unlikely that they would have paid full price.

One of the most important tools is known as a hurdle. The idea is that to get a discount the buyer has to first jump a figurative hurdle, proving that they are serious about saving money. If the hurdle is well thought out and constructed a buyer that is less concerned about price will not be inclined to bother – they would rather just pay full price. The vendor gets an additional (lower margin, but still profitable) sale without losing (or cannibalizing) the extra profit that comes with the full price sale.

Weather, in particular really bad weather, can be used as a such a hurdle. Right now for example much of Eastern North America is experiencing record cold temperatures and/or snowfall.

It's awful! Nobody wants to be out in that stuff. And that presents an opportunity to use the bad weather as a hurdle.

Discounts on in-store shopping will appeal only to those that are most serious about saving money. Those that don't mind paying full price will stay home and pay full price for delivery, or wait to pay full price when the weather improves.



Tags: Hurdles
Category: Examples

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