Of Price and Men

Our local Home Depot was so crowded on Labor Day, you would have thought they were giving away lumber and pipe fittings. I spent a good 10 minutes dodging shopping carts while weeding through bags of hardware looking for the proper #8 screws to go with my $6.97 mailbox — not an employee was in sight to help me with this chore. Then I had to wait at the register for almost 15 minutes for a price check on said mailbox. Midway through our wait, my husband turned to me to say, “I can’t wait until the economy turns around to see how much Home Depot’s business drops off.”

His point was that amid the economic uncertainty, consumers are willing to settle for incompetent service in exchange for saving a few bucks. I know I am. My household is one of those hit hard financially this year. (Not only was my husband out of work for four months, but we also owned Lucent and Cisco stock!) So whereas a year ago we might have huffed out of Home Depot and ordered a nicer, and more expensive, mailbox from a catalog or the Web, this time we suffered in the name of savings.

No wonder that some catalogers that were once adamently opposed to offering discounts plan to introduce them this holiday season, as Moira Cotlier found while researching her cover story, “Making Them an Offer.” Unfortunately, few mailers enjoy the same buying and back-end efficiencies as Home Depot and Kmart and Toys “R” Us, so they’re likely to come out of a price war bloody and beaten — if they emerge at all.

An alternative strategy mentioned in Moira’s story is that of promoting a catalog’s wealth of new product. New exclusive product would be even better. My guess is that when shopping for commodities — be it a best-selling book, the latest PlayStation game, or a #8 screw — most consumers will decide where to buy based primarily on price. But if it’s an item they cannot find elsewhere, then they’ll be willing to shell out more than they might have planned — they’ll have to, or else they’ll have to sacrifice the product altogether.

And let’s face it: Americans aren’t big on sacrifice. If we were, we wouldn’t have one of the lowest personal savings rates among the industrialized nations — around 1% of disposable income.

Besides, while the economy is sluggish, it isn’t moribund. July’s unemployment rate of 4.5% was up from the 12-month low of 3.2% in October 2000. But even if unemployment nears 5% before the end of the year, as several economists predict, that’s still on a par with the joblessness rate of early and mid-1997, and below the nearly 8% unemployment we suffered in 1992.

So I predict that while Joe Consumer is going to look hard for bargains, he is also going to pay more for those items he wants and can’t find elsewhere. Even I just splurged, paying $10 more than I usually do on children’s footwear on a pair of “squeaky shoes” — canvas shoes with a squeaker embedded in the sole — that are almost impossible to find. But before I paint my basement next month, I’ll be muttering under my breath as I wait — and wait — on line with my supplies at Home Depot. After all, a paint roller is a paint roller is a paint roller.

For the latest industry news, updated daily, visit the Catalog Age Website at www.CatalogAgemag.com!

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