Manipulated discounts are common in the LED Industry – Learn ow to spot dodgy LED discounts !
I was watching an episode of Watchdog recently, which included a segment by Oz Clarke on the special offers and huge discounts that saturate the supermarket wine market.
As I listened to what he was explaining, I realised that he could just as easily have been talking about the LED lighting market. The same old tricks – designed to convince customers that they’re getting a great deal – are used in both sectors.
Real Vs. Perceived Value
We all love a good deal, don’t we? We love the idea that we’re spending sensibly and stretching our money just that little bit further.
However, Watchdog’s exposé on supermarket wine shone a light on the tactics used to warp customers’ perception of value by using discounts and “special offers”.
At the start, Clarke says,
“Recently, along with a lot of other wine critics, I’ve found myself becoming increasingly irritated by the way some supermarkets are marketing wine to us, and concerned by the way people have got into the habit of buying it.
“We’ve become addicted to deals and they are available everywhere. Over 60% of the wine we buy in supermarkets is discounted; most of it at half price.
“Is it just me, or do some of these bottles seem to be at half price for an awful lot of the time? And if that is the case, are we getting an amazing deal on a half-price bottle of plonk, or are we just having the wool pulled over our eyes by some smart marketing device?”
A Simple Numbers Game…
Clarke went on to explain explained that some of the best-selling supermarket booze can be heavily discounted or on promotion for between 33% to 62% in a year.
So ask yourself this: why is a supermarket willing to sell you a £10 bottle of wine for £5? Why would they choose to reduce that product by 50% and pass those savings on to you?
The fact is, they’re not the ones making a loss – you are.
Huge reductions like this are usually just a marketing trick. That £10 wine was never worth £10 in the first place – marking it up and discounting it by 50% is a trick to convince you that you’ve bagged yourself a bargain. In reality, the product was only ever worth £5.
The Inside Scoop From Sainsbury’s
Joining Clarke on the show was Alan Cheeseman, a wine industry consultant who was head of wine at Sainsburys for nine years. Cheeseman commented:
“You retail the wine at a price, let’s say £12. Then, having got your stock in, you decide that you might not sell much at that price.
“So you put it into bigger distribution to more shops around the country, and you halve the price, so £12 becomes £6. The trouble with that is it wasn’t worth £12 in the first place.
“It’s a £6 wine and it might not even be worth £6.”
The Real Deal
A typical £4.99 supermarket wine contains about 20p worth of actual wine. The rest of the price goes on taxes, marketing, logistics and – crucially – profit margins.
So imagine that you snap up a bottle of wine for £5, thinking that it’s been knocked down from £10. Except that now you know it’s not been knocked down at all – it’s been bumped up from 20p.
Starting to feel ripped off? Me too.
Wine expert Cheeseman concluded by saying,
“As a member of the trade, I would say that the industry isn’t doing us any good. I think ethically it’s something I’d like to see the back of.”
Hear, hear, Alan.
So What About LED Lighting?
The same cut-price frenzy that plagues the supermarket wine sector has become firmly established in the LED lighting industry.
A simple search for LED lights will throw up hundreds of results, most of which are websites claiming to sell LED spotlights and other products at impossibly low prices.
You’ll find LED retailers offering discounts of anything between 10% and a seemingly impressive 50%. If you’re unfortunate enough to sign up for their newsletter, you’ll be treated to emails about their “flash sales” and “LED Sundays”, sometimes on a daily basis.
If it seems too good to be true, it usually is.
Take it from me: the GU10 LED spotlight advertised at £10 that spends most of the year with 15% off was never worth £10 in the first place.
It’s probably not worth the discounted price either. What you are seeing is nothing more than a marketing trick to give the illusion you are buying a quality product that has been heavily discounted.
What you’re actually buying is a cheap product with plenty of profit for the retailer.
No Discounts – Big Difference!
With well-lit you won’t see any made up recommended retail prices in bright red on our website, crossed out and replaced by cheery green discounts. None of our customers will ever be bombarded with highly manipulated and fake discount offers.
Well If we could afford to offer heavily discounted rates, we’d be charging too much in the first place. It’s that simple. We source the very best quality products and sell them on our website at a fair price.
No big margins, no big “discounts”.
What You See Is What You Get
When you see a product for £10, £15 or £20 on our website, you’ll know that’s exactly what it’s worth. We believe in keeping our prices as fair as possible – and we let consistent quality, not cut prices, tell our story.
So, next time you see any product – whether it’s a bottle of wine or an LED lamp – with a big discount sticker on it for a long period of time, take a moment to ask yourself if you’re getting the bargain you think you are.
And when in doubt, come and talk to the experts at snttrading.wpengine.com.
Managing Director – Chris Stimson