How Retailers Get You to Keep Spending

It’s summer – a time when many of us spend our money on cookouts, swimwear and gas for road trips. But this isn’t all we’re buying. Retailers in more industries are coming up with new ways to get you in the door and keep you coming back.

Take Amazon. Their Subscribe and Save program offers lower prices on a wide variety of goods, which show up at your door at scheduled intervals. They hope these low prices will entice you to sign up to receive products regularly. Then there’s Amazon Prime. For $79 a year you get unlimited free 2-day shipping on most items on their site. Studies have shown that people buy more if free shipping is offered. But for that $79 up front, you start to feel obligated to shop at Amazon more often than you normally would. Finally, their Kindle Fire tablet, which came out in late 2011, hooks you in by encouraging you to download e-books and songs from their online catalog.

Offering the original product at a discount or even free is another way retailers get you into their ecosystem. Printers and razors are two examples.

Manufacturers sell printers at rock bottom prices, often as low as $30, and force you to buy expensive ink refills that cost as much as the original printer. Since all printer cartridges are different, your only option is to buy that manufacturer’s refills. Thus, you’re forced to pay their inflated prices for years and years anytime you run out of ink.

Then there are razors. Companies like Gillette often give away razors for free on college campuses. Then they turn around and sell four-packs of razor heads for about $18. This works out to $4.50 for 3 weeks of shaving. What a ripoff! But I’ll let you in on a little secret. Razor blades are stainless steel. If you take care of them they’ll last for a year or more. In fact, I’ve been using the same razor for 30 months and counting!

Taking care of a razor blade means rinsing it out well, drying it completely and occasionally sharpening it. The best way to sharpen it is to use the inside of your forearm. After every 5 shaves or so, push the razor from your elbow area to your wrist. Your skin acts like leather, and is great for sharpening razor blades.

Retailers use all sorts of strategies to keep you coming back for more. Be aware of this next time you get that screaming deal!

Can you think of any other companies that use this strategy to keep you coming back?

4 thoughts on “How Retailers Get You to Keep Spending

  1. I remember after I turned 18 I received a Gilette Mach 3 razor in the mail with a couple extra cartidges. I was hooked, and I used the Mach 3 for probably three or four years. Now I stick with cheap disposable razors that work just as well at a fraction of the cost.

  2. Pingback: The Round Table – August 17, 2012

  3. “Free Shipping” has been a huge success, especially if it increases the size of the average order to the retailer. If you buy 20% more and more often, they can afford the shipping. :o) Plus it includes a false sense of urgency. (some free shipping offers are time limited)

    • Yes! I can’t tell you how many times I’ve thought, “Well, since there’s free shipping we might as well add on a few more items!” This is exactly what they want you to do.

      Offering free shipping might cost a little, particularly when customers order the bare minimum, but you know they’re making it back (and more) with customers who add extra items. If not, they wouldn’t offer free shipping!

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