Wednesday, June 29, 2011

Two dresses for $500: Bargain or not

Bargain of course! If you read my previous post on the Chanel dress and Burberry coat, $500 for two dresses is a bargain compared to buying just a single Chanel dress for $15000 ;)

"Everyone has a price" is a quote that is often bandied around to illustrate how vulnerable humans are to briberies. It assumes that 'everyone' is only moral to a certain degree and if you throw enough temptations at them, they'll fold and buckle in to your negotiations.

It also has an economic application. Companies and marketers need to price their products correctly in order to get their prospective customers to spend. Price it too high = no sale, price it too low = it's too cheap and they wait for it to get cheaper. If you're interested in reading up on pricing strategies and how it affects our buying behaviour, you can read up on 'price elasticity of demand'.

While I was studying, I spent several years working part-time across several retail sectors such as merchandising, seafood and food retailing. When certain products were deeply discounted, instead of rejoicing and buying tons of the discounted item or food, shoppers would ask me suspiciously, "Why is it on such a large special? Is it off? Is there something wrong with it? Is it damaged?"

If instead, the discount was only a minor discount, it was insane to see how many people thought it was a bargain and thus bought piles of the discounted item/food. I never quite understood that mentality and the cynical, distrustful queries that accompanied any deep discounts yet minor discounts triggered hoarding behaviour.

Would you spend $500 to buy two dresses? Directed at my female readers of course. If you're a male reader thinking wtf are you reading this post, would you be fine with your significant other spending that much on her dresses?

Oddly enough, the "everyone has a price' quote just plonked itself into my mind when two friends were discussing dress prices and how they couldn't believe one of their colleagues spent approximately $500 to buy two dresses.

Their opinions were along the lines of 'It's outrageous...a expensive' and my opinion were along the lines of 'That's cheap...what a bargain...' 

So there we were, clashing in our opinion on how much was too much to spend on fashion and clothing. Having said that, there are other friends out there who buy luxury labels and wouldn't baulk at spending $3k on dresses.

I <3 dresses and yes, I know my weaknesses and dresses are one of them. If you did decide to read about price elasticity of demand, then you'll know why some fashion labels price their products outrageously knowing that the demand for their clothes are price inelastic.

 Check out the drool worthy Christian Dior cream booties that have three buckles and is retailing for $2050. Or the glamourous Salvatore Ferragamo woven gold clutch purse that is retailing for $3290? that's expensive! @_@

So what are your weaknesses?

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