The retail industry faces monumental challenges when it comes to getting customers to shop and purchase. With so much competition for your dollar, retailers use means to manipulate the consumer into further purchases with products, pricing and placement.
Pricing
Sale items: We all love a sale, but it’s been documented that customers will purchase items priced at 2-for-$1.29 more often than the same item priced singly at 49 cents even though it is clearly more expensive. Having multiple items for sale for one price gives the perception of better value, whether true or not.
Related: What’s Your Purchasing Behaviour Style?
BOGO’s: Buy One Get One for 50% off is popular with many retailers. The focus is on the 50% off with customers thinking that both are half price. Have you gone into a store intending to buy one item and ending up with two thinking you got a great deal? The aim of this type of pricing is to get you to buy multiples.
Placement
Checkouts: You’re waiting in the excruciating long line to pay for your items so you pick up a magazine to flip through, then you see some batteries you could use and, you’re getting a little hungry so a chocolate bar to tide you over now and a big bag of chips for later and before you know it you’ve picked up more items than you planned.
Overall, POP displays placed here is a great place overall to increase store revenue.
Entryway: Studies have shown that when customers enter a store they don’t even notice anything in the first fifteen feet, then they look to the right and head in that direction. This is the ideal spot for placing new, seasonal and feature products. Alternatively, you might think this is a good spot for sale items but the store doesn’t want customers to stop here and not continue through the rest of the store.
Restrooms: The aisles leading to the restrooms are the most travelled and are prime space, especially for impulse, decorative and unusual items. They catch your eye on the way in, then get a closer look on the way out.
Add-ons: These are items that relate to the feature product that you may need and should get. Printer and ink next to the computers, stainless steel cleaner next to the pot sets, small appliances together with the related cook book – you get the idea.
Related: Shopping – Too Many Choices
Using Your 5 Senses
Farmers markets are gaining popularity in urban areas. They are more interesting to shop in with their tables of bountiful produce, freshly baked goods, and beautiful flowers. Display of the multiple colours, smells and tastes makes for a more pleasurable experience than the typical supermarket where you’re confronted by mediocre produce, too much packaging and aisles of frozen goods.
If retailers can get you to touch, smell and, or, sample their product the chances will skyrocket that you’ll buy it. Stores that identify their target demographic play the music that is/was popular when that group is/was in high school. That music makes you feel happy – linger – buy more. In the store where I worked they played classic soft rock during the day so the target was – you guessed it – boomer women.
Sales Staff
I know that these days it’s almost impossible to find a sales clerk to help you in many big box stores. Or they say “Hi” when you enter the department and then disappear from view.
Related: What’s Happening To The Service Industry?
In actual fact, a friendly sales associate is a huge asset to the retailer. We don’t want to be rude. When a store employee is chatty, helps us out and makes suggestions, we feel the need to buy (especially add-ons) because we’ve taken up so much of their time.
Convenience And Comfort
We placed shopping carts in the back of the store and baskets in several locations so the customers could keep on picking up items without having to return to the front of the store. Chairs for the shoppers’ companions keeps them from hurrying things up. We often led husbands – weary from looking at just one more thing – to our massage chairs where they relaxed in comfort (and often fell asleep).
So What Does This Mean To You?
There is a psychology of shopping and a good retail manager will be well aware of it. 70% of all purchases are unplanned. The longer you spend in a store, the greater your chance of turning from a looker into a buyer.
New technology will use your smart phone to track your purchases with displays tailored to the shoppers that use them.
Before heading to the store, make a list and stick to it – you know what you need. Even if something is on sale, if you don’t need it then it’s a waste of money. Don’t browse unnecessarily or wander aimlessly. Say, “No thank you, I’m just looking” to the chatty sales clerk – this is code for “please don’t bother me unless I ask for help”. Keep your money.
I made the final lease payment on my 2007 Hyundai Tucson a few weeks ago. Next week I’m going to the dealership with a cheque for $10,000 to buy out the car lease. The vehicle is still in great shape, and with only 74,000 kilometres on it, I plan on driving it for at least another 10 years.
We originally went with a car lease instead of financing or buying used because our cash flow was tight and we didn’t have enough money saved up to buy something decent.
For many people, cars are about psychology and how you feel about yourself as much as they’re about four wheels. At the time, we had one vehicle to get us both around, and it wasn’t the most reliable car on the road. After taking a road trip to BC in the middle of July in our black Elantra with no air conditioning, we came home and decided to get a new car.
Related: My Brand New Car
There’s no doubt that leasing is the most expensive way to get a car. The lower monthly payments are great for a few years, but when the lease is up you’re left with the choice of returning your car to the dealership or buying it out.
Is buying out your car lease a good idea?
If you want to continue driving your car after your lease is up, buying out the lease can be a good option. Since you already know the car’s history and its condition, it’s like getting a used car without the uncertainties of buying from a dealer or a stranger.
Also, if you’ve exceeded your mileage limits, or have excessive wear or damages and want to avoid paying the related penalties, you should consider buying out your car lease.
Related: How Often Should You Service Your Vehicle?
The residual value is typically non-negotiable with the lease company, but it doesn’t hurt to ask. If the company won’t negotiate, you need to decide if the stated price is fair.
When you lease a car, you’re paying for the car’s depreciation. What’s left over at the end is the residual, which is the same as your lease-end purchase price. So when you buy a car for the residual value, you’re simply paying for the portion of your car’s original price that you haven’t already paid.
The other way to look at this option is from a market value perspective. If you had to buy a similar used car from a dealer or individual, with the same mileage and equipment, what would you have to pay?
Before I decided to buy out my car lease, I did some research to see the fair market value of a 2007 Tucson. According to Canadian Black Book, the car should be worth $10,250 – and that’s assuming there’s 120,000 kilometres on the vehicle (24,000 per year).
I also looked at Kijiji for used cars in my area, but the asking prices for similar vehicles was over $10,000 and they all had more mileage than my car.
Final Thoughts
While leasing was a good option for us at the time, we decided to put a stop to the perpetual cycle of car payments that end up costing us thousands of dollars over our lifetime.
Related: Why Leasing A Car Can Make Sense For Young Families
We’re confident we bought a reliable used car for a fair price, and plan on driving it for a long time. We’ll also start setting aside a few hundred bucks a month so when we’re ready to buy another vehicle down the road, we can pay for it with cash.
While we pay higher taxes than the residents of many other countries, Canadians enjoy a world class public health care system. This system provides for many of our health related needs except when we are traveling outside of the country.
A recent study conducted by Bank Of Montreal revealed that 60% of Canadians do not regularly purchase travel medical insurance before a trip abroad. This is an alarming statistic since out of country medical services can be extremely costly. Emergency evacuation, dental services or even prolonged hospital visits could end up costing you thousands of dollars in the event of an accident.
Related: Health And Dental Insurance – Not Really Insurance
The study also notes that only 50% of respondents knew they were responsible for coverage when outside of the country. For the 50% that didn’t know they were responsible, let’s go over the coverage options that are available.
- Medical Coverage: This basic coverage includes trips to the hospital, emergency dental work, doctors visits, emergency evacuation, flying a relative to your bedside and more.
- Trip Cancellation: This added coverage lets you cancel your trip and get some or all of your money back. Every policy is different but a trip can be cancelled for a variety of reasons such as: you change your mind, get sick or have important work commitments. The trip cancellation premium charged to the purchaser is usually a percentage of the total trip cost.
- Lost Or Stolen Baggage: For even more coverage, you can insure your belongings against theft or loss. This coverage is usually capped at a certain dollar value so if you lose a $5,000 watch you will maybe receive $500. Again, this varies by policy.
Why Travel Medical Insurance Is Important
Now that you know the options, it should be clear that medical coverage is the most important of the three as a trip can always be rescheduled and lost or stolen items can easily be replaced. Your health and well being cannot!
Perhaps the 60% of Canadians who do not purchase travel medical insurance feel that cost is an issue. A quick check with the travel insurance company Travel Guard reveals that medical coverage for an individual between 0-59 years of age for 7 days costs just $23. For those over 60 coverage can cost the same ($23) provided you are in good health and answer a medical questionnaire.
RBC Insurance also offers travel medical insurance for the same period for $35, a 50% difference in price. It pays to shop around! As always, read any policy for the fine details.
Related: Save Money By Traveling In Hard Times
When you leave your country of residence chances are you are going to a place that you are unfamiliar with. Unfamiliar places bring their own dangers and pitfalls. As an avid traveler I would never go on a trip without travel medical insurance and have needed to use it on a few occasions.
In Australia I needed to see a doctor when my ear became plugged with sand due to swimming in rough surf. Jumping off a waterfall in Costa Rica yielded a sprained joint in my back which was determined after a visit to a clinic for x-rays and a visit with a doctor.
More recently at an all-inclusive resort in Mexico I tripped and fell on some stairs (no alcohol was involved!) and partially tore a tendon in my hand which again required medical attention.
As you can see both seemingly benign activities and more adventurous ones can lead to requiring medical attention. Don’t be stuck paying out of your own pocket for treatment.
Be sure to check your credit card to see if you receive travel medical coverage. Many premium credit cards include this as a feature for short duration trips. Also, if you are travelling for business your employer most likely covers you under their insurance plan. This should be verified of course.
Related: Best Credit Cards For Travel Rewards
In closing, always remember to have travel medical insurance when travelling outside of the country. ALWAYS read the fine print for any policy in order to know what’s covered, what isn’t and what to do in the event of an emergency.
Safe Travels!
Andrew Martin is a personal finance and investing blogger from Toronto, Ontario with a background in technology and a passion for travel. His blog, She Thinks I’m Cheap aims to help Canadians make more money by sharing facts, stories and advice.