November 8, 2015

Three Trees and an Observation in Consumer Economics

How did I get so far behind? Wasn’t it just October? And now it’s already almost mid November? Adding insult to injury, most of the stores I frequent have already started their holiday deals and I haven’t even figured out when I’m on the hunt for yet!

One thing I know I need more of is ornaments. It’s no secret that I’m quite addicted to Christmas Tree, and Christmas ornaments. Every year I buy at least a couple new ornaments for our tree. Pretty much every year since Domingo and I first started dating he has been teasing me about the ornaments that will one day grace my tree. We’d be at Hallmark store and he’d point to the Twilight Ornament, or the Hanna Montana Ornament. One day, he’d warn, our future kids would want those. The notion of kid centric ornaments on our tree didn’t bother me, per se. I do love me some Dr. Suess, as evident from Nicole’s first birthday party. But I do cringe a little at the idea of tween pop culture on the tree. I could do without vampire romance, thank you very much.

The big driver for ornaments this year is the second tree I’ve been pinning over. As we were discussing where the trees will go in our new home it finally dawned on us; why stop there? We can get a third kid-height, narrow tree for the playroom. The kids can have total say of what goes on the tree, and decorate it to their hearts content. Domingo and I plan to put up the other two trees and decorate them with the fragile ornaments Thanksgiving night after the girls go to sleep, per tradition. Then, the following morning, we’ll let the girls direct the show when setting up their own tree. It’s all the magic of “Santa” bringing the tree, with all the family fun of setting it up together.

Three trees it is!

Yesterday evening I found the multi-colored light tree on Target.com, equivalent to one we really liked when we saw it in person. The website were stacking sales, including “a buy three, get an additional 15% off” ending that night. I did the frugal thing: searched by sale items, sorted by price, and added two $1 ornament hooks to my card for an additional $9 in savings. This morning I couldn’t help myself. I logged back on to target.com and found the tree had a whole new set of stackable sales, and was now about $5 lower. My order, made just hours before, couldn’t be canceled. My two choices were to suck it up, or call the customer help line and ask for a price reduction. I’m sure you can guess which option I picked. The kind customer sales agent refunded my order the requested amount seemingly without verifying the exact price difference.

There could be several reasons why Target issued me a flat price adjustment. Perhaps they have a minimum price for which they want to sell the item, and my price adjustment was still north of it. (If my math is correct, I came out 11 cents ahead of today’s sale price.) Or perhaps they view it as a means of customer retention. In retail there’s a notion of customer lifetime value. It’s often cheaper to retain a customer than to acquire a new one. There’s also a growing field in Customer Analytics, analytics derived from customer data. Target knows a surprising amount about me. They know my credit card information and address from the online order. From there they can easily figure out how many other purchases I’ve made using the same card or shipping to the same address. From my purchase history they can predict things about me, and my future consumer behaviors. They can predict how profitable I’m likely to continue to be. That assessment cam lead to special perks. It’s a practice that’s been around for ages (think Casino “comps”), but is becoming more frequent with the advent of big data.

It’s hard to know for sure what a company considers my worth to be. Eleven cents extra doesn’t tell you much. I tend to think of myself as not a very profitable customer. I like to think I’m pretty good about ferreting out the best possible deals. I’m clearly the kind of person who double checks sale prices after a purchase, and requests price matching even when it’s just a few dollars. Each dollar I save is a dollar the retailer doesn’t earn. The margins on me can’t be very good. Domingo keeps reminding me it’s not just the margins retailers care about, but the reduction of inventory. In that regard I’m a golden goose, what with my three trees and two Halloween costumes per child. In my own analysis, I did point out that I paid slightly more ($5-7 per child) than average.

This year I’m sure the models will tell the retailers I’m anything but frugal. I’m going to try and hold off on the bulk of my holiday decorations until the after sales, but we will need at least some ornaments for our new trees.

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  1. […] We’re going from one to three trees this year, two more than past years, which means we’ll need a ton more ornaments. I’m […]

  2. […] Domingo. I have dragged him all over town the past couple of weeks looking for our third tree, our main tree. We’ve been to Lowes (twice!), Home Depot (twice!), Sears, JCPenney, […]


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