Do You Spave -- Spend in Order to Save?
My husband warily eyed the big brown J.Crew box that recently came in the mail. But I told him not to worry: I was spaving!
Spaving = spending in order to save. I had been shopping online (shh, don't tell my boss!) and had to order $150 worth of clothes to avoid the onerous shipping fee. So I bought more than I wanted and simply returned the rest at my leisure. I had to spend in order to save.
The same thing happened at the grocery store. Cinnamon Toast Crunch, my husband's favorite cereal, was going for three for $6. So I stocked up to get the cheaper price per box of CTC.
One of my friends dubbed this phenomenon spaving: You're saving money in the long run, but you may have to lay out more cash in the short-term. Retailers love this idea because it encourages shoppers to purchase more products. Whenever they discount a product, they take a hit to their profits but hope they can make up the difference by selling more items. Requiring shoppers to buy multiple products to get the lower price helps guarantee them volume.
"What retailers try to do is to drive sales, and one of the ways you drive sales is by multiple sales," said Dan Butler, vice president of merchandising and operations for the National Retail Federation, a trade group. "You can make more profit just by driving sheer numbers."
Just look at Aeropostale, which has consistently outperformed competitors during this downturn -- same-store sales were up 20 percent last month -- because it has a reputation for value. Its promotion right now? Graphic T-shirts that are two for $20 and camis that are buy one get one free.
But there are pitfalls to be wary of when spaving. Many shoppers simply can't pass up what they see as a "deal." If you don't really need or want two graphic T-shirts, it may be cheaper to just buy one at $17.50. If I never returned the extra merchandise I ordered from J.Crew, would free shipping still feel like a deal?
There may also be danger for retailers. The New York Times published an interesting item last month that showed consumers may be willing to pay more for solo products --bundling them together at discounted prices cheapens them in shoppers' eyes.
What do you think? Tell me about your spaving adventures!
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