I don't want to be perfect, just better...

Wednesday, November 12, 2008

IKEA sale, and the power of the loss leader

Yesterday I told you about us hitting the IKEA; it was the last day of the sale that we got up at the crack of dawn (not really but I wanted to sleep late) to go to.

What I didn't tell you about was the amazing line that was wrapped around the parking lot by nine am. The store doesn't open until ten. Some people were there at 8 am with folding chairs and a fortitude that I don't have. I sat in the van while hubby sat in line.

Yes, a lot of people were able to take advantage of the great deal on the dish set and the table. I learned something yesterday (I am turning into my grandmother - learn something new everyday) this sale really illustrated the power of the loss-leader sale to me.

A loss-leader sale is when one product (in this case the dish set or table) is sold at a loss($30 dollar dish set for $9.99) because the store expects to make up the lost profits (the twenty dollars). The store bets that people will purchase other items at the same time as the loss leader product.

So while the workers at the store may loathe to see people queuing up two or three hours before the store opens, the management teams are very excited. They know that they often have more people in the store than the loss leader product. The hope when they run out of the loss leader product that you will be upset and purchase the next cheapest alternative, or you will buy coordinating pieces to go with your loss leader product.

We did get an additional product - a set of flexible cutting boards. We got these for free basically. IKEA gives you a voucher for 3% back with the use of a debit card and we redeemed our two dollar and odd cents coupon we received on an earlier visit. Plus we got an additional coupon for our next visit, which will probably revolve around a loss leader sell.

Come on IKEA, sell some Billy bookcases!

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