November 15, 2013
Is Haggling Retail’s New Sport?
While in a less confrontational manner than a Turkish bazaar, a deal-driven climate has apparently opened the way for haggling at retail.
That’s the view of Mark Ellwood, author of the new book, Bargain Fever: How to Shop in a Discounted World.
In most cases, haggling involves simply asking if any coupons or deals are currently available. But many associates — particularly those on commission — have some flexibility to change pricing terms to close a deal. Price-checking apps and the internet’s role in increasing price transparency also play a role in making haggling more acceptable.
In a column in the Chicago Sun-Times, Mr. Ellwood said that instead of assuming questioning a price is "an aggressive gesture," look for a polite way to start conversation. One simple opener he mentions: "Is that the best you can do?" Another version: "I’m such a flake. I haven’t checked my e-mail in ages — are you running any promotions or sales?"
A light joke — "Gosh, is this the ‘I’m not feeling wealthy today’ price?" — can also serve as a conversation starter.
Mr. Ellwood points to one shopper at Prada who earned a 20 percent discount by paying cash instead of credit. Establishing a relationship with the associate may also lead to an invitation to a pre-sale.
"There will forever be a way to find a discount," he said in an interview with Time. "In a store, ask the sales assistant if there’s a friends and family sale, or maybe if 10 percent off is offered to anyone who provides an email address. (It doesn’t have to be a valid one, does it?)"
Jasmine Birtles, founder of Moneymagpie.com, which offers money-saving tips, says haggling’s stigma has also lessened in the U.K. Speaking to the Express in the U.K., she also advises a friendly approach. Her tips include exploring if a store matches competitors’ pricing; asking for add-ons, such as free delivery for a TV or free case for an iPad; talking to the manager who likely has the most clout to change terms; and seeing if discounts are available for buying in bulk.
As for where haggling is accepted, Ms. Birtles says, "You can pretty much try your luck anywhere."
- Mark Ellwood, author of Bargain Fever: How to Shop in a Discounted World, on how to haggle with flair – Chicago Sun-Times
- Book Review: ‘Bargain Fever’ by Mark Ellwood – The Wall Street Journal (sub. required)
- Never Shop in October and Other Secrets From a Retail Guru – Bloomberg Businessweek
- Killer Holiday Shopping Tips From the King of Bargains – Time
- How to barter for a brilliant bargain – Express
BrainTrust
Recent Discussions
Discussion Questions
Has haggling become more common and accepted at retail? If so, why do you think that’s so? Should associates have greater flexibility these days to change terms or offer perks to close sales?
Poll
Any time there is someone earning a commission, it’s easy to haggle. Associates should have the flexibility of haggling so long as it comes out of their end. Haggling has seemed to me to be about the same as it always has been, particularly on high-ticket items.
I hate articles like this. As I wrote many years ago in one post “Are You A Haggling Hapless Retailer?” and a second post that Seth Godin’s comment to empower employees to discount “Seth Godin’s Got It Wrong” – these are the path to losing margins – quickly.
It fuels the idea that retailers are all “raking it in” which is clearly not the case. There are many cheap people out there – court them and court disaster. Your retail sales training has to be how to get margin, not loopholes to lose it.
Haggling to me is not a discount or use of a coupon. It is asking a retailer to take $70 dollars for an item marked $100. The retailer then says $90 and the consumer says $80 and they agree on $85. Now that is haggling. We do not do that here unless shopping for a car, house, or an item sold at a flea market. Everything else is being a good shopper: using discounts, paying cash, coupons, etc.
Haggling has become accepted at retail as consumers try to stretch limited budgets. For some, it’s become a sport to see how little one can pay for a desired item. Sales associates should have flexibility to offer existing coupons to customers who are coupon-less or offer bundles that add value, while increasing register rings. Price matching is a bit trickier, but should be considered, particularly with similar competitors.
I’ve become very used to searching the web for promotional codes before buying. Macy’s for one, has always been up front about mentioning deals the customer might not be aware of. I think this is a good thing.
As David mentions, commissioned sales people can indeed take the opportunity to take money out of their own hides, and store managers have always had a price override key available to them. Any more than that seems like a bad idea and an invitation to fraud.
And…if you’ve ever actually been in a Turkish bazaar, or lived in a country with a lot of mom and pop carts you know how tiresome the obligatory haggle can be. And that spawns a new cycle of differentiating by saying “The price is the price”.
In other words, we don’t need to add more haggling. At least, I can say *I* don’t want to engage in the practice.
There is a definitely a “cultural” aspect related to haggling. If you go shopping most anywhere in India and Asia, there are few “price tags”. Haggling is accepted and a normal part of the transaction. In fact, one of the Best Buy challenges in China was that they established “fixed” prices on merchandise, and the consumers expected to haggle.
I agree with Bob Phibbs. These articles are a recipe disaster for western retailers who are already operating on thin margins. Instead of empowering employees to discount, training needs to focus on how to add value beyond price.
This is a dangerous perspective for retailers. Haggling exists only with small, desperate retailers who are playing a fool’s game.
Offering a current coupon or promotion is perfectly legit. Matching a competitor’s price may be a good policy. Negotiating on the price is silly, unnecessary and dangerous! No credible retailer does.
And, I’d probably suggest that Prada didn’t see any of the cash from the story of the 20% cash discount above … that’s the work of an employee thief, likely.
The retail world has been commoditized. Unless you are truly unique, there is a good chance someone else is selling what you sell – and the price is available online. Retailers have made public statements that they will match online prices from other retailers. We’ve trained the consumer to price shop and ask for the lower price. That simple.
Now there are companies that offer value in the form of customer service, warranties, etc. They may be able to escape the commodity trap.
The associate must be trained how to respond in different situations. Role play and train. Prepare them for consumers that negotiate, ask for more value, etc.
It all goes back to “why” customers haggle. If the price is fair, customers are unlikely to want to haggle. The Internet is a great leveler. Customers can see if the product is available at a lower price elsewhere and even, after the sale. Ultimately, if you compete on price, be ready to entertain haggling and price-matching. If instead you compete on other value parameters (experience, support, value-adds, commitment to environment/fair-trade practices etc) in addition to price, you will find it easier to justify your rates. Pushing the issue onto your associates (so they accommodate haggling customers with their commissions) will not only push away your customers, it will also dilute associate morale.
We’re wimps in the U.S., compared to Asia, Middle East and most other regions. This has a lot to do with the products involved in the U.S. You can negotiate on more expensive items, and I ALWAYS do: Cars, jewelry, appliances, etc. The challenge comes in with items like apparel. Would you negotiate on a $100 dress? I think you should. The item is going to be marked down most likely anyway. I say give some guidance to staff to ensure the sale isn’t lost.
Bob Phibbs nailed this one. Self-respecting retailers should not haggle with deal seekers. Better to provide a superior experience to their most profitable customers. Oh, and most retail associates don’t make enough commission to give it away.
Making use of promotions the retailer is already offering hardly qualifies as “haggling,” and as the article offers more anecdotes than data, I’m skeptical to put much faith in the claim; the few examples offered are all high-end retailers, which makes perfect sense, since buying a $10,000 necklace is a highly personalized transaction (try asking the cashier at Walmart for a personalized discount and see how far you get!)
As for whether flexibility is a good idea or not, that depends on how bright – or at least cautious – the salesperson is, but isn’t deciding what to price in order to sell goods supposed to be one of management’s (main) responsibilities?
Here is what I have to say about that. Who is going to teach sales associates how to maximize margins and still haggle with the customer? I really don’t think that is in the skill set of the minimum wage employee. Do you?
*Sigh* these articles crop up every couple of years. Like everyone else has said, it’s not the American culture, but it has some relevance in the luxury market or for big-ticket items. The average consumer can’t make much use of it. And have you ever had a retailer NOT try to sell you on their in-house credit card or membership for a discount? They hardly keep those sorts of things a secret.
In this new economy, no one wants to pay ‘sticker’ and most shoppers have been conditioned to seek a better deal.
If a retailer competes solely on price, then they’re going to have to get great at haggling and price matching.
Those that are able to transcend the price-only mindset of today’s bargain-hunting consumer by differentiating themselves via selection, location, service, atmosphere, etc. will flourish.
Asking for coupons, special sales, additional % off, etc. are not examples of haggling in the sense you’ll find in other regions of the world. It’s just not the same thing at all.
In the U.S., our national pastime is shopping and we want to feel like we got a good deal when we walk out of the store or push the checkout button. The last thing we want is to wonder if we could have done better. This transparency is an element we value and when it’s not there it confuses the heck out of us and I’ve seen it first hand in shopping districts in Athens, Cairo, and Tangier to name a few.
Having said that, we do have categories of products where we are expected to haggle and we hate it (’cause again when you’re done you never know if you got a fair deal or not) – think of new (or worse yet, used) cars, that engagement ring, or camera equipment.
Negotiating price is a consumer default. Allowing salespeople who aren’t trained in negotiating to haggle is a dangerous strategy. Creating an environment that encourages haggling is dangerous. Each industry and each company is unique, so there’s no one-rule-fits-all. There is one commonality; haggling destroys margins and profit.
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Any time there is someone earning a commission, it’s easy to haggle. Associates should have the flexibility of haggling so long as it comes out of their end. Haggling has seemed to me to be about the same as it always has been, particularly on high-ticket items.
I hate articles like this. As I wrote many years ago in one post “Are You A Haggling Hapless Retailer?” and a second post that Seth Godin’s comment to empower employees to discount “Seth Godin’s Got It Wrong” – these are the path to losing margins – quickly.
It fuels the idea that retailers are all “raking it in” which is clearly not the case. There are many cheap people out there – court them and court disaster. Your retail sales training has to be how to get margin, not loopholes to lose it.
Haggling to me is not a discount or use of a coupon. It is asking a retailer to take $70 dollars for an item marked $100. The retailer then says $90 and the consumer says $80 and they agree on $85. Now that is haggling. We do not do that here unless shopping for a car, house, or an item sold at a flea market. Everything else is being a good shopper: using discounts, paying cash, coupons, etc.
Haggling has become accepted at retail as consumers try to stretch limited budgets. For some, it’s become a sport to see how little one can pay for a desired item. Sales associates should have flexibility to offer existing coupons to customers who are coupon-less or offer bundles that add value, while increasing register rings. Price matching is a bit trickier, but should be considered, particularly with similar competitors.
I’ve become very used to searching the web for promotional codes before buying. Macy’s for one, has always been up front about mentioning deals the customer might not be aware of. I think this is a good thing.
As David mentions, commissioned sales people can indeed take the opportunity to take money out of their own hides, and store managers have always had a price override key available to them. Any more than that seems like a bad idea and an invitation to fraud.
And…if you’ve ever actually been in a Turkish bazaar, or lived in a country with a lot of mom and pop carts you know how tiresome the obligatory haggle can be. And that spawns a new cycle of differentiating by saying “The price is the price”.
In other words, we don’t need to add more haggling. At least, I can say *I* don’t want to engage in the practice.
There is a definitely a “cultural” aspect related to haggling. If you go shopping most anywhere in India and Asia, there are few “price tags”. Haggling is accepted and a normal part of the transaction. In fact, one of the Best Buy challenges in China was that they established “fixed” prices on merchandise, and the consumers expected to haggle.
I agree with Bob Phibbs. These articles are a recipe disaster for western retailers who are already operating on thin margins. Instead of empowering employees to discount, training needs to focus on how to add value beyond price.
This is a dangerous perspective for retailers. Haggling exists only with small, desperate retailers who are playing a fool’s game.
Offering a current coupon or promotion is perfectly legit. Matching a competitor’s price may be a good policy. Negotiating on the price is silly, unnecessary and dangerous! No credible retailer does.
And, I’d probably suggest that Prada didn’t see any of the cash from the story of the 20% cash discount above … that’s the work of an employee thief, likely.
The retail world has been commoditized. Unless you are truly unique, there is a good chance someone else is selling what you sell – and the price is available online. Retailers have made public statements that they will match online prices from other retailers. We’ve trained the consumer to price shop and ask for the lower price. That simple.
Now there are companies that offer value in the form of customer service, warranties, etc. They may be able to escape the commodity trap.
The associate must be trained how to respond in different situations. Role play and train. Prepare them for consumers that negotiate, ask for more value, etc.
It all goes back to “why” customers haggle. If the price is fair, customers are unlikely to want to haggle. The Internet is a great leveler. Customers can see if the product is available at a lower price elsewhere and even, after the sale. Ultimately, if you compete on price, be ready to entertain haggling and price-matching. If instead you compete on other value parameters (experience, support, value-adds, commitment to environment/fair-trade practices etc) in addition to price, you will find it easier to justify your rates. Pushing the issue onto your associates (so they accommodate haggling customers with their commissions) will not only push away your customers, it will also dilute associate morale.
We’re wimps in the U.S., compared to Asia, Middle East and most other regions. This has a lot to do with the products involved in the U.S. You can negotiate on more expensive items, and I ALWAYS do: Cars, jewelry, appliances, etc. The challenge comes in with items like apparel. Would you negotiate on a $100 dress? I think you should. The item is going to be marked down most likely anyway. I say give some guidance to staff to ensure the sale isn’t lost.
Bob Phibbs nailed this one. Self-respecting retailers should not haggle with deal seekers. Better to provide a superior experience to their most profitable customers. Oh, and most retail associates don’t make enough commission to give it away.
Making use of promotions the retailer is already offering hardly qualifies as “haggling,” and as the article offers more anecdotes than data, I’m skeptical to put much faith in the claim; the few examples offered are all high-end retailers, which makes perfect sense, since buying a $10,000 necklace is a highly personalized transaction (try asking the cashier at Walmart for a personalized discount and see how far you get!)
As for whether flexibility is a good idea or not, that depends on how bright – or at least cautious – the salesperson is, but isn’t deciding what to price in order to sell goods supposed to be one of management’s (main) responsibilities?
Here is what I have to say about that. Who is going to teach sales associates how to maximize margins and still haggle with the customer? I really don’t think that is in the skill set of the minimum wage employee. Do you?
*Sigh* these articles crop up every couple of years. Like everyone else has said, it’s not the American culture, but it has some relevance in the luxury market or for big-ticket items. The average consumer can’t make much use of it. And have you ever had a retailer NOT try to sell you on their in-house credit card or membership for a discount? They hardly keep those sorts of things a secret.
In this new economy, no one wants to pay ‘sticker’ and most shoppers have been conditioned to seek a better deal.
If a retailer competes solely on price, then they’re going to have to get great at haggling and price matching.
Those that are able to transcend the price-only mindset of today’s bargain-hunting consumer by differentiating themselves via selection, location, service, atmosphere, etc. will flourish.
Asking for coupons, special sales, additional % off, etc. are not examples of haggling in the sense you’ll find in other regions of the world. It’s just not the same thing at all.
In the U.S., our national pastime is shopping and we want to feel like we got a good deal when we walk out of the store or push the checkout button. The last thing we want is to wonder if we could have done better. This transparency is an element we value and when it’s not there it confuses the heck out of us and I’ve seen it first hand in shopping districts in Athens, Cairo, and Tangier to name a few.
Having said that, we do have categories of products where we are expected to haggle and we hate it (’cause again when you’re done you never know if you got a fair deal or not) – think of new (or worse yet, used) cars, that engagement ring, or camera equipment.
Negotiating price is a consumer default. Allowing salespeople who aren’t trained in negotiating to haggle is a dangerous strategy. Creating an environment that encourages haggling is dangerous. Each industry and each company is unique, so there’s no one-rule-fits-all. There is one commonality; haggling destroys margins and profit.