The following is from the May 11, 2017, edition of WalletHub. Marketing Professor Raj Sethuraman, the Harold Simmons Chair of Marketing in SMU Cox School of Business, provided expertise for this story.
May 17, 2017
Ask The Experts
For a more-intimate look at Memorial Day savings opportunities, we posed the following questions to a panel of leading retail experts. You can find their bios and responses below.
- What types of products are most likely to be discounted as part of a Memorial Day Sale?
- What tips do you have for finding the best Memorial Day deals?
- What tips do you have for avoiding overspending during the Memorial Day sales period?
Professor and the Harold Simmons Chair of Marketing in SMU Cox School of Business
What types of products are most likely to be discounted as part of a Memorial Day Sale?
Some academics have questioned the wisdom of heavy discounting during special event days such as Memorial Day, Easter, President’s Day, and even during Christmas time. Their argument is that since consumers are in a shopping mood during these times due to holidays or festivities, and demand is likely to be strong, it is enough to creatively signal high value without actual heavy discounting. But the reality of today for many manufacturers and retailers facing increased competition and well-informed consumers, is promote or perish! The question is not whether to discount but what items to discount, when and by how much.
Academics have developed some theories to answer these questions. One is the event fit theory that says items on sale can fit with the event at that time. Memorial Day is a day of remembrance of war heroes who have sacrificed their lives for the country. Event fit would include patriotism-related items like flags, uniforms and memorabilia. I would say such items should not be discounted heavily -- they should be offered for its true intrinsic, emotional value and should not be denigrated through discount tactics.
The other theory is time-fit -- discount items that match with the time the event takes place. In this case, it is start of summer, end of school year, I would agree with time-fit theory especially in the present competitive environment. Not surprisingly, items that are generally discounted and do well sales wise are clothes and home goods, which apparently accounted for nearly 70% of Memorial Day sale last year. Travel is another category that scores high on time-fit. I would even say marketers should try to creatively blend event-fit with time-fit. That is, these fallen soldiers have given us the freedom so we can build an honest home for ourselves, spend time at home or travel with family.
A third theory is quantity-theory, which is predicated on the notion that stocking and consumption increases during special times. This would suggest aggressive discounting for larger packages -- like 6- and 12 -packs, by warehouse stores such as Costco and by online stores like Amazon.
What tips do you have for finding the best Memorial Day deals?
Since I am not an avid deal shopper, I can’t say based on personal experience. But there is evidence that special-day sales are starting long before the special days. In this case, it is not just Memorial Day but memorial month -- deals start from the beginning of May. So, starting to look for deals beginning of May is one good tip -- early bird may get the worm, especially when there are a limited number of worms to go around, as in travel and large-ticket items like furniture.
Another tip is to get out of your comfort zone in looking for deals -- seek out stores that you have not frequented or has not been in your radar -- such as warehouse stores, some specialty stores for unique items and even online. You may be in for a pleasant surprise. Also, spend time looking for special codes, color codes, and stackable coupons through multiple sources.
What tips do you have for avoiding overspending during the Memorial Day sales period?
I can give some advice on this (as I have to my wife).
Don’t be overzealous -- buy items with true savings that you actually need. Don’t buy simply because you can save 50% because, as Ricky told Lucy in the TV show, you can save 100% by not buying.
If you need them at a later time, wait. There are so many special day sales including Tax free day, Labor day, Thanksgiving, Christmas, and retailers are raring to give you (maybe even better) deals at those times. One statistic says only 14% of U.S. households avail of Memorial Day sale.
In particular, do not buy electronic items (wait until Thanksgiving) or, some say, even outdoor grilles which are a better deal during Labor Day.
Read the full set of interviews and data