10 for $X.XX Deals: Follow-Up Part 1

Recently we published an article on a grocery store that has decided to change the way they do sales. Rather than simply offer sales based on individual products, the company has switched to offering “When You Buy Ten” sales. In other words, the customer has to buy 10 total products to get the sale, rather than get the sale on individual items (for those that are unaware, when most grocery stores offer 10/$5.00 sales, you can still buy one or two items and get the same sale – the presentation is designed to make you want to buy more).

This is a big change – forcing people to buy 10 items rather than giving them the option may turn some customers away, but it is also a great opportunity to try product pairings. Using your research to discover what products people enjoy buying together, in order to increase the amount sold at purchase. It is difficult to tell whether or not the company was actually utilizing these pairings, because the items on sale included things like chili, cereal, and soap – none of which appear to be related at first glance.

Maybe their research showed these were grouped together, but from an outsider standpoint that seemed unlikely.

Today I had another thought – perhaps these items weren’t related on purpose . Maybe the idea is that companies can take advantage of other product pairings by putting something on sale that the customer is expected to buy in bulk. Let’s look at an example: Let’s say that research showed that customers that buy chili also buy cheese and hot sauce.

Now let’s say that only chili is on the 10 for $5.00 sale (.50 cents per can, minimum of 10 cans). Ten cans is a lot of chili, but the sale is quite good and chili doesn’t get old. So now the customer picks up ten cans of chili at the market.

But now they need two things that are not on sale – cheese and hot sauce. Since the customer now has 10 cans of chili, they also need to buy cheese and hot sauce. Using this line of thinking, the grocery store can actually handle a loss by selling cans at a cheap price, because the resulting profit from the full-priced product pairs can generate far more than the amount of money they lost per can.

This article will be continued in an upcoming post. Related Blog Part 2 Related Blog