Pricing transparency is key to an efficient market. Walmart's pricing is transparent...yet subtly devious.
A couple of months ago, I was buying groceries at Walmart, and I stopped by the cereal aisle. I looked at a box of cereal, then noticed the same box on a higher shelf, both at the same price.
I was about the grab the more easily accessible box, when I noticed an anomaly: they were both the same price, but one had a different price/oz. I hesitated, and began to study the two boxes more carefully.
One box had a higher net weight than the other. Both boxes had the same exact length and height. So looking at the front of the box, both boxes appeared to be identical. However, turning the boxes sideways revealed one was thicker than the other.
And which box do you suppose was right at eye level, the easiest to see and grab? You guessed it, the 15.3 oz box priced at $2.98. The 18 oz box, also priced at $2.98 (the better value, obviously), was a little bit higher, and required more effort to notice and acquire.
I was so fascinated by this discovery, I began to pay more attention when shopping, and I noticed a pattern emerge. Gimmicky pricing and packaging used to trick consumers into spending more to get less. Spend more, live worse? Walmart may need a new slogan.
On another occasion, I was buying some cheap shampoo at Walmart. I noticed the 15 oz bottle for $0.97, while the 22.5 oz bottle was $1.50. A quick calculation in my head and, whoa! The larger size actually cost more per ounce. Buy in bulk to save money? Maybe not.
I noticed the same quandary buying gum and toilet paper, where the largest packages were not the cheapest per unit/weight, etc.
Why does Walmart do this? They no doubt understand pricing psychology. They know that certain price points will maximize revenue.
Does this make Walmart evil? No, they are just trying to make money. Their prices are clearly posted, so it's not hard to figure it out. It just requires some remedial math skills, or the use of a calculator.
And Walmart does generally have reasonable prices when compared to other retailers. My point is not to start Walmart bashing, as I think the media has taken care of that task.
My point is that Walmart, like any other vendor, is not your friend. They are not looking out for your best interests. That is your job.
So do it.
I was about the grab the more easily accessible box, when I noticed an anomaly: they were both the same price, but one had a different price/oz. I hesitated, and began to study the two boxes more carefully.
One box had a higher net weight than the other. Both boxes had the same exact length and height. So looking at the front of the box, both boxes appeared to be identical. However, turning the boxes sideways revealed one was thicker than the other.
And which box do you suppose was right at eye level, the easiest to see and grab? You guessed it, the 15.3 oz box priced at $2.98. The 18 oz box, also priced at $2.98 (the better value, obviously), was a little bit higher, and required more effort to notice and acquire.
I was so fascinated by this discovery, I began to pay more attention when shopping, and I noticed a pattern emerge. Gimmicky pricing and packaging used to trick consumers into spending more to get less. Spend more, live worse? Walmart may need a new slogan.
On another occasion, I was buying some cheap shampoo at Walmart. I noticed the 15 oz bottle for $0.97, while the 22.5 oz bottle was $1.50. A quick calculation in my head and, whoa! The larger size actually cost more per ounce. Buy in bulk to save money? Maybe not.
I noticed the same quandary buying gum and toilet paper, where the largest packages were not the cheapest per unit/weight, etc.
Why does Walmart do this? They no doubt understand pricing psychology. They know that certain price points will maximize revenue.
Does this make Walmart evil? No, they are just trying to make money. Their prices are clearly posted, so it's not hard to figure it out. It just requires some remedial math skills, or the use of a calculator.
And Walmart does generally have reasonable prices when compared to other retailers. My point is not to start Walmart bashing, as I think the media has taken care of that task.
My point is that Walmart, like any other vendor, is not your friend. They are not looking out for your best interests. That is your job.
So do it.
