Retailers Figure Out They Shouldn’t Offer Discounts To Customers Who Don’t Care

Retailers are now able to compile and sort through massive amounts of data about their customers, and they’ve used that information to figure out which customers simply don’t care about discounts, and make their purchasing decisions without paying attention to them. Logically enough, retailers simply don’t send discount offers to these customers.

That’s part of why there are separate “outlet” stores for large department stores like Nordstrom and Saks Fifth Avenue. “You don’t want to offer discounts to full-price shoppers, because over time your profit margins will erode,” one marketing expert explained to the Wall Street Journal.

Seems simple, but knowing which category each customer belongs to and marketing accordingly is key for retailers. At the same time, they also don’t want us to realize that they’re watching our shopping habits in order to figure out what to sell to us. While we all know this on some level, especially when sneaker ads follow us everywhere online after just one shopping trip, experts say that customers don’t like to be consciously reminded that they’ve extensively tested each option and the placement of every word within the subject line of an e-mail. They know what makes people in general click, and what makes you click in particular.

Retailers save discounts for bargain hunters [Wall Street Journal]