Kopitiam Bot

News · Lifestyle · Tech

Payless’ Upscale ‘Palessi’ Stunt And The Power Of Branding

(Source: forbes.com)

Kudos to Payless for scoring a PR coup with its’ “Palessi” hoax. The chain fabricated a fake designer (Bruno Palessi) and staged a “grand opening” of the line’s expensive shoes in a former Armani store. All the trappings of luxe were there: the fawning fashionistas, the camera crews, the velvet ropes. And the shoes: Payless models that usually sell for less than $40 had price tags as high as $600 for the occasion. Sure enough, unsuspecting shoeaholics shelled out $3,000 for the drastically overpriced footwear during the two-night scam. But there was a happy ending. They got their money back after the fact, along with the chance to be paid to appear in a Payless spot extolling the shoes.

A victory for the contingent of skeptics we might call “The Emperor has no Clothes Faction” that decries the hypocrisy of overpriced brands? Perhaps. Vindication for smart shoppers who counsel buyers to do their homework before they shell out the big bucks based on a flimsy promise of quality? Certainly. Confirmation that some people just make too much money? Yeah, sure. But proof that consumers are gullible sheep who will do anything marketers tell them? Maybe not.

Payless gave us a valuable clinic on the power of branding—and a stunt that I’ll certainly be sharing with my marketing students for many years. But in (at least a partial) defense of those eager buyers who were taken in by the ruse, let’s take a step back and look at the situation from their perspective.

When a consumer is confronted with a new offering, he or she is motivated to figure out just what it is and whether it’s an object to covet or avoid. We’re all natural problem solvers, and like Sherlock Holmes we look for cues to resolve a mystery. We’re also active learners, and we invoke our prior experiences in similar situations to guide our inquiry.

In this case, that reliance on a lifetime of insights gleaned from numerous shopping expeditions actually came back to bite these hapless fashion fanatics .  That’s because the perpetrators cleverly used this accumulated knowledge to create a scenario that looked like a duck and quacked like a duck. We probably can’t blame these footwear enthusiasts for calling it a duck. We are creatures of consistency, and we love to see what we are looking for. And, when we process information we often resort to “shortcuts” based upon our prior observations of linkages between causes and effects. Psychologists call these heuristics, or rules-of-thumb we commonly use to facilitate decision making. In this case, there were several heuristics at work – and their effectiveness provides valuable lessons for any retailer:

Heuristic No. 1: price/quality relationships

If it’s expensive, it must be good. We all know this isn’t necessarily true (hopefully), but perhaps the relationship between price and quality is true enough to justify a gamble. Indeed, while we usually assume that we’ll sell more of a good if we lower the price, in some cases the opposite occurs: If a product (especially a luxury good) is just sitting there, try raising the price instead. Economists refer to this non-obvious effect as prestige pricing.

Heuristic No. 2: venue/quality relationships

If the surroundings are opulent, the merchandise must be, too. Shoppers rely upon environmental cues such as colors (pastels are more upscale than primaries), textures (plush carpeting trumps tile floors), sounds, odors, etc. to figure out whether the merchandise makes the grade. Store designers call the calculated use of sensory elements atmospherics, and just as package designers understand that we do in fact often tell a book by its cover, the careful use of furnishings and structural elements can do a lot of the sales job for you.

Heuristic No. 3: country/quality relationships

A product’s “address” matters. We Americans love to buy Italian shoes, French wine and microwave ovens built in South Korea. Consumers associate certain items with specific countries, and products from those countries often attempt to benefit from these linkages. That’s why country of origin (COO) is an important heuristic. Marketers often go out of their way to link a brand with a country to capitalize on associations people have with a specific COO—like Häagen-Dazs ice cream and that authentic Danish taste (which is actually owned by Nestlé and made in Scandinavian strongholds like New Jersey). So, invoking an “authentic” Italian name like Bruno Palessi, even though the shoes actually came from Bob Payless, was an artful touch.

When the fisherman goes to such elaborate lengths as faking an opulent store and stocking it with glamorous models, camerapersons, etc., we shouldn’t be surprised when in fact he catches some unwitting fish. Payless at least had the scruples to throw the fish back by refunding the victims’ money. Retailers who run real businesses—and who don’t want or need to stage such an elaborate hoax—still can learn some lessons from Payless about the power of assumptions. And, we consumers can learn a thing or two about questioning our assumptions: Caveat emptor, after all.

More Info: forbes.com

Money Matters
%d bloggers like this: