This is the fastest business model I have ever seen to clear inventory. A clothing store owner sold all the inventory in the end of the year. How did he do it?
He held a lottery in a department store. Consumers only needed to pay 100US dollars to participate in the lottery, and the first prize was an electric car worth 5000US dollars. 100 people as a group would participate in the lottery. Among these 100 people, only one person could win the first prize. And how about the other 99 people ? The merchant gave each of them a 200US-dollar coupon that could be used in the department store, as well as a coat priced at 150US dollars. Consumers, therefore, could hardly say no to such an offer. They spent 100US dollars and got a chance to win the first prize. Even if they didn’t, they would not lose money. They got a 150US-dollar jacket and a 200US-dollar coupon. This event, therefore, drew numerous people.
How did the merchant make money? In fact, the 200US-dollar coupons were provided for free by the department store because this lottery event could bring people and business to the department store. The cost of each 150US-dollar coat is only 50US dollars. Since each consumer paid 100US dollars to participate but only took away a 50US-dollar coat, the merchant would get a 50US dollar net profit. With 100 people as a group, the merchant gets exactly 5000US dollars in cash, which equaled to the value of the electric car, the grand prize. As he used this method to sell coats, the inventory was quickly emptied. Don’t you think this marketing strategy is very similar to the popular lucky bag marketing?
What is Lucky Bag Marketing?
Lucky bag marketing is a marketing strategy of Japanese department stores during the New Year. Merchants put multiple items into bags or boxes for sale, and these are called "lucky bags."
Usually, the contents of the lucky bags are not disclosed in advance. In terms of price, the value of the goods in the lucky bag is generally higher than its list price. For example, a lucky bag priced at 100US dollars may be loaded with goods priced at 200US dollars. In recent years, the contents may randomly include grand prizes such as cars, high-end appliances and cash.
The significance of lucky bag marketing
For consumers, the lucky bag is equivalent to a discount in the mall, and upon purchase, the feeling of anticipation of what lies in the bag is also quite tempting. Some consumers may be satisfied with getting what they expected, but some will regret getting an item they don't need. Therefore, some people think that the lucky bag is actually a form of gambling in disguise.
From the merchant's point of view, the lucky bag can not only attract consumers, but also serves to clear up excessive inventory. Also, many consumers will publish unboxing articles and experience articles on the Internet after purchasing the lucky bags, which indirectly increases the brand’s internet exposure.
The Consumer Psychology of Lucky Bags
From the psychological point of view, when a decision of purchase comes with uncertainty, people's desire to buy will decrease. It is because the uncertainty can make people anxious and unable to make decisions.
However, some experts have found that in fact, uncertainty can sometimes increase people's desire to buy something. For example, in the scenario of buying lottery tickets, uncertainty reinforces the anticipation of outcomes(the possibility of winning the big prize), and the possible feeling of surprise (the fantasy of winning the big prize.)
The lucky bag marketing strategy not only increases the business volume and clears the inventory, but also allows consumers to buy discount products and have the opportunity to win a grand prize. It is a win-win business model. If you are worried about the problem of inventory, you may consider lucky bag marketing.
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