I stood up on stage in front of a crowd of retailers and said, “If you have to ask how much it costs, …”
The crowd answered in unison, “You can’t afford it!”
That quote is attributed to J.P. Morgan and is so common and pervasive that if you say the first half, almost everyone can tell you the second half. So why do so many stores put out merchandise without price tags forcing customers to ask?
Michigan was the last state in the union to get rid of its pricing rules where every product that could be priced had to be priced. The Michigan Retailers Association was against this rule because it put an undue burden on large retailers having to price out every single item.
Imagine the cost of all those price tags and the staff necessary to tag all those items. Oh the outrage! (sarcasm intended)
Frankly, as a consumer, I loved that law. I hate having to walk around the store looking for a scanner to verify if the price on the shelf is correct (if there is a price on the shelf at all!) I find it annoying when items aren’t priced. Many of your customers do, too.
Putting price tags on products is not a cost issue. It is a customer service issue.
I’ve talked before about how signs increase sales because a large percentage of the population would rather read a sign than interact with a salesperson. Price tags are the lowest hanging fruit on the sign tree.
Price tags are one half of the Value Equation (Perceived Worth versus Actual Price). Without a price, a customer cannot finish that equation and make a decision to buy on her own. Many of those customers walk away without asking an associate for help.
“If you have to ask how much it costs, you can’t afford it.” J.P. Morgan
That quote popped into my mind last weekend while I was shopping in Dillard’s. They have a nice Big & Tall section that has mostly served me well since I discovered it. Several items, however, were not priced. I couldn’t help think how often I moved on to the next item that was priced rather than look for a sales associate.
I’m not your typical male shopper. I will ask for help … if it is convenient enough. Unfortunately, more and more stores are cutting back on their sales force, leaving fewer and fewer sales associates even available to help me.
This is the downward spiral of customer service that is driving customers to the Internet. Yes, pricing your items is a Customer Service thing. If you aren’t pricing every individual item that you possibly can, you aren’t offering good customer service.
If you aren’t pricing every individual item you possibly can, you’re losing sales.
In the big box stores I can take an unmarked item to a scanner somewhere on the floor. In a smaller store I may just scan the UPC with my phone and buy it online right in front of you.
I hated when Michigan finally gave up the price tag rule. It meant worse customer service for consumers in general. It meant lower costs for all those big-box competitors that didn’t care about customer service in the first place, and it drove more people to the Internet for shopping just to avoid the lousy customer service they got from the big retailers.
Yeah, it gave me a chance to outshine the competition with superior service, but for most people it lowered their overall perception of brick & mortar shopping in general. All boats sink with the tide, too.
You might think buying all those price tags and paying staff to tag all those items costs too much. I will tell you that by not properly pricing your merchandise, it is costing you far more.
PS The last thing you ever want a customer to think is, “I probably can’t afford it.” Yet since that J.P. Morgan quote is so pervasive, that is exactly the thought in their head every time they can’t find a price. I can’t make that quote or that thought go away, but I can encourage you to eliminate that thought in your store. Make your pricing crystal clear.
PPS One other benefit of pricing all your merchandise is Trust. If your stuff isn’t marked, it looks like you’re hiding something or playing games with your pricing. That undermines trust, which undermines relationships and loyalty.