<font color="#ff0000">Guest Article: </font> Kishore Chakraborti on discounts versus bargains

As the retail revolution inundates India and shopping has become the national pastime, with stores shouting themselves hoarse through discount stickers, Indian consumers are desperately trying to still a traditional itch – the itch to bargain. What is the big deal with bargaining? What does it talk about us as consumers? Can big retail players exploit the itch to win in the cut-throat world of retail competition?

Let’s first try to understand what ‘bargain’ means and then try to fathom what mystic yearnings the word unlocks in us. I referred to the English lexicon to get the varying nuances of the word. The dictionary defines ‘bargain’ as a noun meaning a good buy/ good deal, and as a verb meaning to haggle. In other words, if you want to convert the activity of buying into a feel-good emotion, you need the action of haggling! Bargaining is backed by a sense of victory. The act of buying remains incomplete if you don’t win.

The intrinsic nature of bargaining is probably inherent in our Indian sense of valuation. The worth of a thing or of a being is not in its appearance. True value needs to be fathomed, arrived at and understood. Valuation is a mind game that needs to be played with argument and counter argument, logic and judgement. Deny your consumer this drama and you are depriving him of the fundamental flavour of shopping.

Ask any marketer and he will agree with the adage that the consumer is king. Well, discounts will never make him feel like one. Discounts reveal themselves as a cold one-sided instrument. They are like an ex parte judgement, decided in your absence and which will continue to be there in your absence. That’s why in spite of its attraction, there is always an air of resentment and mistrust around discount offers: “Do you think they are actually giving a 50 per cent discount?” “Have they inflated the prices? Is it a gimmick?” Perhaps the complaint is not so much against the staged presentation as against depriving consumers the central role which they have enjoyed traditionally.

Bargaining is participative and interactive. It allows scope for action and drama. A commercial transaction is taken to the level of a stage performance. Emotions are unlocked and the codes of win and defeat are played in high theatrical pitch. The whole game starts with a mock transfer of ownership, “Yeh aap hi ka shop hai (Consider it your shop).” The consumer is apparently given a free hand to decide – “Price jo marzi de do (Pay whatever you want)”. And then the dramatic exchange starts. The consumer’s onslaught on the price is countered by the seller’s cries for mercy. Gestures of submission and disarming laughter are interspersed with dialogues like, “If you pay me that price, I will surely die – please keep my home fires burning.” There are continuous references to the customer as ‘malik’ and ‘sethji’. The seller plays himself down as a small trader, ‘chhota aadmi’ and ‘gareeb vyapari’ till the game of stooping to conquer comes to a happy end for both.

It’s a win-win situation for both. The seller has managed to get his desired price and also an impressed customer, who will in all probability come back a second time. The buyer goes back happy, relishing every nuance of his financial victory. The episode will be transformed into an engrossing narrative for the next social gathering.

Most big stores that have already adopted the fixed price straightjacket have also managed to keep alive a diluted version of the bargain drama through its team of salesmen who tell the consumer in whispers to approach the owner. The owner obliges: “Just to honour your words… Because you are the first customer.” To a nation that has been brought up on a generous diet of bargaining, a declared discount will always tend to appear bland.

As malls and stores vie with each other and retailers try to get a bigger share of the consumer pie, it may be a good idea to look at the old bargain strategy as a new success formula. Give the bargain bloodhounds a taste of blood – if not in its undiluted version, at least a ritualistic version? Why not package a discount as a bargain?

I visited the famous GR Thanga Maligai jewellery shop in Chennai on Akshaya Thritiya day. A troop of security guards was trying its best to control a huge crowd queuing outside the shop for entry. The shop had meticulously segmented itself according to price, weight, range and type of jewellery and was plastered with stickers carrying the ‘fixed price’ message, but I found plenty of customers engaged in discount dialogues with the salesmen. Once the final prices were worked out, the salesmen tipped off the customers: “If you want a further reduction, approach the manager.” The looks of elation and disbelief on the faces of the customers when they got a further discount from the manager had to be seen to be believed.

The taste of victory is always sweeter if it is also unexpected. Discounts are always visible, but bargains are created. They have a magical quality of producing value from thin air. As long as retailers can deliver this magic, consumers will love them. Consistently delivering this magic will be the most challenging job for tomorrow’s retailers. Who knows, the retail store may need to re brand itself to do that. If discount stores have appeared, can bargain bazaars be far behind?

(The writer is vice-president, consumer insight, McCann Erickson.)