Veblen Goods

You probably already know what a Veblen Good is, right? If not, read about it here. 

There are few things more destructive to overall marketing/merchandising strategy than Black Friday / Cyber Monday. It's a complete abomination perpetuated by low-functioning marketers who do not understand customer behavior. If you are angry right now, I'm talking about you.

There's a company most of you know ... they were 40% off before Black Friday / Cyber Monday, they were around 50% off on Black Friday, they were around 60% off on Cyber Monday (sorry you idiots who bought a few days earlier, jokes on you), and then they broke their promise by staying at around 60% off for most of the week following Cyber Monday.

This brand could care less about their customers ... they'd rather gamify some of the customers into a purchase that does not remotely optimize profit ... because ... well, it has to be because they could care less about customers and know nothing about marketing strategy or merchandising strategy.

It's at least 30 years ago now, but I distinctly remember a merchant at Lands' End communicating "assortment strategy" to me. Maybe you have somebody at your current company that cares about you and does something similar? He told me how his core assortment was around $40, stretched up to $80, and then he had items around $100 or $125 that served two purposes.

1. They anchored the rest of the assortment ... in the same way Safeway gladly puts a bottle of Caymus wine in the top row of their assortment for $89, hoping you'll think that $19 is a bargain.
2. Those items were "aspirational" ... meaning that "some" of his customers wanted the status of the $125 item and would gladly pay the money to gain emotional benefits. "I'm wearing a $125 shirt, and you aren't". As a result, he sold more of the $125 items than the math suggested you could sell.

Yea, that's the definition of Veblen Goods.

I recall my first year at Nordstrom ... locked into a conference room at 7:00pm as a new Vice President, while two Merchandising Executives battled each other in front of the Nordstrom family. One argued the importance of a $400 handbag (Veblen Goods), the other argued the importance of a $40 option. Both were ultimately right, neither understood the importance of a merchandising assortment that communicated a story.

I read your email marketing campaigns, folks. Almost all of you care about the cheap half of your assortment, and you are willing to make it cheaper via incomprehensible discounts and promotions. 

Too few of you understand the importance of a Veblen Good.

And maybe that's why you struggle to acquire new customers.