SeriesInundated with marketing messages, Americans adjust their spending belt.

In part 1 and 2 of this series, we looked at the tricks of the trade and the psychology behind the advertising end of marketing. In this article we look at what sales and marketing tactics are covering up: The quality corner-cutting that’s happening as we’re simultaneously being driven into a consuming frenzy.

I love a bargain. This weekend I thought I officially became the queen of treasure hunting when I found a mint condition Christian Dior cashmere coat at the thrift store. When I checked out the label, I found a tiny label stating “Made in America.” Made in America? Christian Dior’s couturier is based in Paris, this little detail gave me reason to pause, and question the authenticity of my find. It could not be coming from the actual Dior couture house with that country of origin label. The question begged to be asked: who designed this coat?

On another day, I headed straight for the sales rack at J Crew, finding three t-shirts for just over the price of one. And on another occasion, when I was strapped for cash and running short of underwear, I’ll admit that I made myself go to T.J. Maxx in search of some fresh pairs among the $6.99 Calvin Klein styles mixed in with the no-name brands for $2.99. I’m totally guilty of buying some of both. But at the moment of that purchase, I was just thankful to find underwear that fit the budget and even some that seemed to save me a few pennies.

Unfortunately, all of the underwear bought that day fell apart faster than any underwear I’ve ever owned. The shoddy underthings went straight into a bag for Goodwill and I had to head to the store once again not long after my purchase. Let’s just say, I had gotten exactly what I paid for.

The Fine Print That Bargain Hunters Miss

There’s nothing like the feeling you get when you find an unbelievable bargain in fashion. Unfortunately, 99% of the time the “unbelievable bargain” is just that. Discounted sales and fashion “bargains” are actually marketing tactics that encourage us to buy more stuff, much of which we don’t necessarily need. The sales tactic: overvalue the nicely displayed full price products in the front of the store so that customers get excited about the discounted stuff on the overcrowded, back sales racks. This encourages us to visit the store more often to look for sales to avoid missing the deal. However, usually when you buy items on sale, you’re in fact paying the price closer to the items actual make-value (just above how much it cost to make it).

Recent reports show that this tactic is now beginning to backfire on the the retailers, especially those who would like to maintain their product quality and regain profit growth to pre-recession profits. Even JC Penny, who in past years held as many as 590 annual promotional, sales and coupon events, has decided it’s time to change their sales tactic.

Not All Designer Labels Are Created Equal

Sales racks aside, what about finding “designer labels for less” in department stores and at discount retailers like T.J. Maxx? What of my “made in America” Christian Dior coat which originally would have been sold in an American department store like Nordstrom’s rather than at the House of Dior? We all equate designer labels with higher quality and value, but in the world of fashion not all designer labels are created equal.

Many successful designer brands have multiple tiers of product qualities that their brands sell to reach a broader market: high end lines for the investment shopper, middle market lines for the value shopper, and low end licensee lines for the bargain shopper. Quality is more closely monitored at the top of the market where the customer is paying a premium and recognizes and expects high quality goods. Quality slides through the middle market where the customer wants better design but is not as aware of the difference in the quality of the make, and the only thing that remains “designer” in the cheaply made bargain basement find is the designer-logo-label stitched in the back.

Vogue, January 1949. Which would you be more likely to purchase: An lower quality no-name umbrella for $15 or a Dior jacquard logo umbrella for $25? The two are probably made at the same place.

That low end product is more or less designed by the factory that works with a brand’s licensing partners. Their only objective is to make easy to produce, lower cost garments for high volume mass production. The designer brands who are named in the labels of these items, in turn, get a nice cut of the sales profit for allowing the use of their logo and brand name. The use of their logo or label in turn push the sales into a frenzy that might not have been possible on an equivalent average or sub-par product.

The Path That Leads To a Global Market Profit Is Licensing

So, how does a Dior Coat come to be made in the USA? It all comes down to licensing agreements (that work kind of like fast food franchises) and the label in my coat tells the tale of how this works.
Back in 1947, Christian Dior and his business partner, Jaques Rouet, were some of the first in the fashion business to pioneer license agreements with international factory partner companies. Before then, being a clothing designer/producer meant you either owned a local factory or a couture house and basically did all of the design and production – albeit tightly monitored – under one roof.

For Dior, who owned his own couture house, fashion was his legacy and he intended to see that legacy, as well as his fortunes, grow. By 1947, he had already set up licensing agreements with production partners to manage lines of furs, socks, perfume, ties and clothes in regional production areas around the globe, thus being able to extend his brand and multiply his sales by selling product in local markets all over the globe near his license producers’ locations. Most likely, Dior would have sent a sketch and a swatch of fabric for the factory to follow and the factory would fill in all the blanks of the details on how to make it.

With a status label like Dior, his licensee partners could sell much more product than they might otherwise, because the couture house’s name was well known among the fashionable society and was considered highly desirable. Meanwhile, Dior could turn his focus toward marketing and advertising his house as a high-end, luxury market brand. This new business model allowed him to continue presenting his exuberantly priced couture collections without the pressure of needing to make a profit on haute couture because the licensed products that he barely touched were making enormous profits behind the scenes.

By August 31, 1964, The New York Times reported on a trend which had designers putting their labels into items that they didn’t actually design. What Dior’s business savvy had started almost two decades earlier had evolved and turned into a full scale, industry-wide, fashion free for all. It started with designers lending out a few sketches to a manufacturer with their branded label attached as a stamp of approval, they then collected their fee and let the manufacturers take over from there. But as the New York Times reported, designers had their names on products they didn’t even recognize, let alone would ever admit to designing. One appalled Parisian designer even bemoaned that he had found his name on cotton gloves that were on sale in New York, cotton gloves apparently being something he would never have made.

Some designer brands were more careful than others to avoid the “white glove” scenario by adjusting their licensing contracts so that all products had to be be approved by someone in their company before they headed to the stores. But overall, the fashion industry fully embraced this new business strategy that left the product details up to the factory and licensing partner and let the designer brand reap the profits without having to do all the work. Many successful brands operate through license agreements today.

Couture house, Pierre Cardin, took it particularly far. With over 900 license agreements, Cardin had manufacturers producing everything from paper clips to automobile interiors with his logo stamped on them. His brand eventually flooded the market, so much so, that it lost its appeal to the “designer” customer and was downgraded to Sears status, where it is still sold today. Clearly Cardin didn’t mind. By that point he had become so wealthy building his brand through advertisements and selling his name, that he had no problem leaving the labors, and the quality control of couture behind him.

The fashion industry had finally figured out how to transform from providing a service – making clothes for people to wear – into a highly profitable business. Brands were able to achieve this by focusing on marketing the concept of their brand as a high end status symbol while selling stuff en masse to the middle and low markets through their license agents. The job of the designer now became to present lifestyle products and advertisement imagery through marketing to keep customers believing that even their lower priced lines were worth the higher price tag attached to the brand name.

What we’re left with after all of this are stores like Macy’s who sell “designer” labeled clothes that the designers barely touched, Calvin Klein underwear that has very little to do with Calvin, and stores like T.J. Maxx, Loehmann’s, and Marshall’s full of “designer brands for less” claiming that they’re selling the “real thing” and leftovers from the high end market. Far from the truth, the leftovers were all made specifically for those low end retailers and can be sold for up to twice as much.

Secret License Agents

So who are these secret agents producing the license product for Calvin Klein, Anna Sui, DKNY, Betsy Johnson, Tommy Hilfiger, Michael Kors, Ralph Lauren and friends? The same guys who are in charge of designing and producing all the no-designer-name stuff it sits next to at the stores where you find designer goods for less. Basically you’re just as well buying no-name underwear for $2.99 as paying double the price to have Calvin Klein’s logo. Some stores, like T.J. Maxx, even have a licensee design office of their own, designing products in the name of their licensee partners, like Calvin Klein, and for their own no-name label brands at the same time so they can handle the details on some of the products in their stores themselves.

An industry friend of mine (who will remain nameless) works in quality control at one of the licensing partners that produce goods for J.C.Penny, Sears, Burlington Coat Factory, Loehmann’s, and T.J.Maxx. She used to manage quality control for brands at factories all over the world. But her new job posed a much more troubling issue than workers not knowing how to hand stitch buttons properly.

“This is the easiest job I’ve ever had. Quality control? What quality control? We get one sample to fit, make color, print, fabric and trim comments on and to approve. Then it goes straight into production. We produce the goods so fast that by the time they hand me a sample to check and approve the quality, the item is already on the factory floor being cut and sewn for the bulk order. My comments can’t even be put into effect,” she says.

“I remember being called into my boss’ office once when there was ‘a problem.’ A jacket had come in with the lining literally shredding on the hanger. This was nothing new. But the real problem was that the item was going to a retailer that required testing (some of the bigger retailers, like JC Penny require every item to have a sample sent in for quality control testing) and this would never pass.”

Was the company going to take a hit and have to absorb the cost of the bum goods? I asked. “Nope. Do you know what they decided to do?” she asked me. “They had me take the sample to a tailor to have the bad lining taken out and replaced with a nicer quality lining. Then they sent that one sample in for testing. Of course it passed, but they just shipped the rest of the product as is, shredded lining and all. I’ve never worked with such unethical people in my 30 years of working in fashion.”

I asked another friend of mine who has worked as a freelance designer in and out of one licensee company that had license agreements with Kenneth Cole and Calvin Klein, as well as producing several no-name lines that would sell at the same retailers that their licensee product would.

“We had to produce designs so fast, we didn’t have time to think about the finishings. Just fabric, sketch, maybe a button. Send it to the factory and leave the details to them to figure out,” she told me. “It was so easy, but the quality was terrible.”

But don’t they get customer complaints about the quality? I asked.

“Why would the stores ever complain? We’re giving them product that’s dirt cheap!” Apparently the customers who frequent these stores just take it for granted that their clothing is disposable. One or two wears out of them is all that is expected. This is also a part of the marketing strategy. It’s rare for anyone to make returns on product at the low end of the market, because it’s just not worth it. None of the product has any value to begin with.

According to Elizabeth Cline, author of Overdressed: the Shockingly High Cost of Cheap Fashion, “In 1930, the average American woman owned an average of nine outfits. Today, we each buy more than 60 pieces of new clothing on average per year.” But according to economists, the average American household only spends 3.1% of their income on clothing, which is approximately 22% less than what Americans spent on clothing in the 1970s – this makes sense with 3 for 1 specials and bargain blowouts but when considering how logical it is for the planet, we might want to dive a little deeper.

Editor’s note: Industry insider Louise Lagosi is not the author’s real name and is used to protect her anonymity.

Image: Diego 3336, The Consumerist, Ell Brown

The post Fashion Marketing 101: What Discount Sales Cover Up appeared first on EcoSalon.

ColumnA behind-the-screen look at the consistently ridiculous inbox of a writer.

At EcoSalon, we receive our fair share of email pitches, and we’ve decided to give you a weekly peek at this valuable information inside our inboxes. These products, people, and services are 100 percent real, although we’re not always sure that they should be.

One very smug Andy Masters has written the definitive book on romance, I mean dating, I mean sales.

His new book, Kiss Your Customer: 77 Reasons Why Sales & Service Are Just Like Dating & Relationships, takes a “creative look at the eerie similarities between business success and relationship success.” What we can learn from business that we can apply to relationships? That it’s good to get a sale? That it’s going, going, gone unless you buy now?

“It’s about the process:  Find ‘em, and then keep ‘em happy!” Masters says. “There is a great irony between the sales process and romantic courtship. There is also a great irony between keeping your customer happy, and keeping your significant other happy.”

Nothing says romance like relentlessly convincing your customer/wife that she needs you.

Says our pitching publicist: “There probably isn’t a groom on the planet who hasn’t felt completely overwhelmed by all of the major decisions (and costs) associated with his wedding day. While most brides revel in the planning process, most men want to run and hide until they find out how much they’re paying. It’s not just the bride’s special day, but the groom’s too, so why not get involved?”

Looks like 1960 just called! Along with every gender stereotype out there! And why are you marrying the jerk who wants to run and hide from his own wedding, anyway?

Be the Man: The Man Registry® Guide for Grooms is supposed to be a humorous guide to navigating “the wedding minefield” giving grooms a “play-by-play of the wedding planning months, answer lingering questions and debunk age-old myths.”

Except all the myths it perpetuates.

Thanks to Napoleon Fireplaces and Grills from Crittenden, Kentucky for sending an over 85%-women-read conscious publication a pitch about how dumb we are at grilling meat.

According to the Bluegrass State based BBQ shop, “males continue to reign in the fiery realm of the grill.”

In fact, according to a 2011 consumer research study, put together for the international Hearth, Patio and Barbecue Association, the male head of the household “is more often the one who makes the decision to use a grill, prepares the food and actually does the work on the grill.”

“Grilling has traditionally been a guy thing, and this research confirms the anecdotal evidence many of us have seen in our own homes for years,” said David Coulson, national advertising manager for Barrie, Ont.-based Napoleon Fireplaces and Grills.

Among the details provided by survey respondents, researchers found such valuable insights as:

– Males handle the majority of the grilling duty.
– The male head of the household cooks about 73% of the meals on gas grills, 72% on charcoal grills and 66% on electric grills.
– Men prepare the food 58% of the time for gas grilling, 55% for charcoal grills and 50% for electric grills.
– Those stats compare to women who handle food prep 39% of the time for gas grilling, 40% for charcoal grills and 49% for meals made on electric grills.
– Men generally make the final call when it comes to whether or not to grill a meal. The survey indicates men typically make the decision 60% of the time for gas grilling, 63% of the time for charcoal grilling and 56% of the time for electric grills.
– Women make the call 36% of the time for gas grilling, 33% of the time for charcoal grilling and 43% of the time for electric grilling.

Where’s the fire?

No matter who actually exercises their grill skills to cook the meal, the job of firing up the equipment usually falls to the man of the house, the survey found.

“It’s extremely important for us to know how people typically use their grills and barbecues so we can tailor our products and services to our customers habits,” Coulson said. “At Napoleon, we have a full line of gourmet gas and charcoal grills to suit any household, no matter who’s at the helm.”

Thanks, David. The next thing we want to know is, if a tree falls in the woods does it make a sound? How much sound? What percentage of deer hear it? Does? Rabbits?

Image: Adactio, Quapan

The post Better Living Through Publicists: I Am the Man Edition appeared first on EcoSalon.

SeriesPart 2: The fashion industry is emerging from its cocoon post-recession, a changed sector where consumers are more cautious, manufacturers are on their toes and designers are struggling to stay afloat doing business as usual. In this five-part series, we take a hard look at the fashion world, speaking with industry leaders, luminaries and experts. This week we ask: Has the recession turned us into cheapskates so we can feel like fulfilled consumers?

Since 2007 they’ve popped up like dandelions: The discount clothing venues we love for all the hot bang we get for our hard-earned buck.

Gilt, My Habit, FashionStake, eBay Fashion, and now even discount eco-commerce sites like the recent launch of JP Selects and LovingEco tantalize us with a designer discount warehouse vibe that appeals to our need to shop. Recession? Heck no, we’re all the same when it comes to discounts whether wealthy or middle class, hoarders or sample salers who need to get more for less. If you think this concept is something new, just look back to post World War 2 consumer habits and you’ll see a direct link to the burgeoning of low-profit-margin strategies designed to attract price-conscious consumers.

The only thing that’s changed is the technology and marketing to hungry consumers and struggling designers.

NOW Showcase, 2011

Joslin Van Arsdale, owner of San Francisco’s Ecocitizen boutique, says sites like Gilt affect eco-commerce because they encourage the quick consumption of cheap, mass produced and disposable goods, and therefore skew the consumer’s perception of value.

“In the past a sample sale was last seasons leftovers. Today, designers who participate in Gilt sales are selling are specifically commissioned by the site and its buyers. Most of the items offered at flash sale sites, are past season designs, or popular designs reinterpreted into cheaper versions of  the original which enable companies like Gilt to maintain healthy margins while also offering  60-70% off.  This is similar to how Target and H&M do their designer collections, same name and design, just cheaper labor and lower quality fabrics,” says Arsdale.

If we think about low-pricing power in the classical sense of the term, we might look at the Wal-Mart volume model, with the idea that the more powerful you are (thousands of locations), the more you can drive your cost down. While we can understand that lower prices drives more sales in the short term, what about the integrity of the brand being sold? Do thoughtful designers really want to brand themselves as deep discounters offering bottom-barrel markdowns?

Designer Eliza Starbuck says it’s become a fear-based business for sustainable designers.

“It’s hard enough to be eco and fashion, an oxymoron in itself, but then having to go against the sustainable model and sell a whole lot of stuff seems pretty counter-intuitive,” says Starbuck.

Van Arsdale says sites like these are training shoppers to expect sales all the time and while in the short term this business model can be a great marketing opportunity for designers, in the long term, it erodes a brand’s perceived value.

“Judging from the success and proliferation of flash sites, it seems that the consumer is unaware that there is a difference in product and quality and mostly doesn’t care,” she says. “Shopping is evolving to a scale of extremes between the very cheap and the very expensive, with nothing in between, similar to what is happening to our middle class.”

But with a current valuation of some $400 million, Gilt Groupe appears to have more staying power than most fashion trends struggling to stay afloat in a traditional way. New York Magazine likens it to a safe haven for designers.

“Last year, as incomes tightened and the fashion industry was left with ruinous amounts of inventory, the company’s business model proved to be a counter-cyclical savior, sucking up goods that otherwise would have moldered,” says the magazine’s writer Andrew Rice, adding that some designers have found “Gilt’s model lucrative enough that they’ve decided to do away with their brick-and-mortar sample sales; others are now making clothes specifically for the site.”

As a result, more and more shops are turning to online sales only and closing brick and mortar venues.

Closed boutique on Newbury Street, Boston

We asked an eBay Fashion spokesperson, who insisted on anonymity, about traffic patterns since the company changed its selling model from what was already in the waste stream to recent high-profile collaborations with Alexander Wang and the CFDA. While they weren’t willing to release statistics at this time, they did respond with this statement:

“Fashion has a new home on eBay at fashion.ebay.com – a dedicated destination that delivers an enhanced shopping experience with new features and sales channels like Fashion Vault that make it easier than ever to explore, find and buy items based on favorite styles, brands and popular trends.”

No longer a hot spot solely for automotive enthusiasts – who in 2005 were eBay’s biggest audience –  eBay has evolved into a clothing and accessory mecca for all financial brackets. And sites like Gilt and eBay Fashion aren’t alone when it comes to selling luxe labels for less.

Trista Dedmon, consignment manager of Brooklyn’s best secret Eva Gentry, sells higher end designers that include Zero + Maria Cornejo, Helmut Lang, Alexander Wang, Marc Jacobs, Chloe, and Marni.

Dedmon says business has picked up with both customers and consigners each season since it opened about five years ago.

“There are definitely a wide variety of shoppers we cater to from the college students looking for affordable Alexander Wang to the established professional who wants to save on a mint condition Balenciaga piece,” she says.

Brooklyn’s Eva Gentry

When asked why, Dedmon says, “It is more than likely due to the current economic climate and everyone reassessing their values. If we become more conscious of our spending habits, this doesn’t necessarily mean our taste level changes. Customers still want designer level garments, but like to stay within their new found budget, which is where a store like ours comes in.”

As recently as 2008, stores like Eva Gentry were gaining popularity quickly, not only college students but with wealthy shoppers accustomed to pricey labels. USA Today writer Laura Petrecca wrote: “There have been many euphemistic labels applied to secondhand goods, including ‘gently used,’ ‘pre-owned’ and ‘like new.’ But in the current economy, they have a new and candid label: ‘hot sellers.’

In the same article, Petrecca notes that three-fourths of resale stores polled said they had higher sales in September and October than in the previous year, and according to the National Association of Resale & Thrift Shops, “The average sales increase was about 35%.”

So what of the plight of the sustainable boutique owner, the entrepreneur supporting conscious consumerism?

Mission Savvy’s brick and mortar store

Vegan boutique owner, Jennifer Miller, has her hands full with her shop, Mission Savvy. Miller has had to forge her way forward through the muck and mire of retail since she opened two years ago in the midst of the recession.

“People want to get more, pay less. Despite its goodwill, the price point on ethical fashion for the average consumer is a big turn off – and I’m in the market to turn people on. Better to purchase something from my store, support the ethical fashion industry, feel good about it with no guilt of over spending and therefore continue to return than not shop at my store at all,” Miller says.

She says her nontraditional approach to operating a boutique has her stocking ethical products but selling at a less than average mark up which is challenging – but it keeps her customers happy and coming back.

“We’re just not there yet as an economy and in commitment. Especially if you are far removed from the fashion industry and the appreciation of the art of it, so that leaves a lot of people spending lots of money on clothes with absolutely no purpose other than to buy something new that looks awesome,” says Miller.

“And as much as people do understand the concept of responsible consumerism, it still comes down to what money can buy and for a lot of us money does buy happiness. Spending too much money on very little is not as appealing as spending a little on a lot.”

The post The Post-Recession Fashion Industry: Discounted Sells appeared first on EcoSalon.

Holiday shopping is almost as exciting as the post-holiday sale shopping that comes on in full force during the month of January. I’ve scooped up beautiful handbags, shoes, jackets and jewelry during this time of the year that I would have never been able to afford otherwise.

In the first week of January, sales are running across the board, and I took the liberty to sniff out my three top picks to buy now and wear later.

1. A Sequin Organic Jersey Kimono Dress from Elsom. Layer it with a pair of leggings, boots, a cute cropped blazer and a vibrant scarf and you’ve got one hot outfit this winter. In the summer, pair it with flats and maybe an oversized boyfriend cardigan for a relaxed look.

2. Skinny Blazer by John Patrick Organic. Every girl needs a good blazer. It’s the LBD of daily wear. You should have a go-to black one, and if you have graduated to a more risky style sense, pretty in pink is the perfect palate for transitioning from winter’s beiges to summer’s whites!

3. NeuAura Plum Heels. Open-toed shoes with layered tights and socks this winter keeps you thick with the fashion pack. When the temperature warms up, lose the layers and go for bare legs.

If you didn’t quite get what you wanted from Santa this year, take it upon yourself to get what you deserve at a discount, and let those pieces carry you through the winter into spring!

The post 3 Pieces to Buy Now (On Sale) to Wear Later appeared first on EcoSalon.

I never liked the term “Black Friday.” It makes me think of evil and bad things like the Black September terrorist outfit of the 1970s or the “Black Tuesday” stock market crash that ushered in the Great Depression. Moreover, it seems odd to me that marketers would describe a shopping day – nay, actually promote a shopping day – with a term that has to do with retail profits (i.e. “getting into the black”) rather than consumers making out well. Who would buy into that?

Well, many of us do. We might second guess them, but marketers know lots of stuff that we don’t. In fact, with access to the latest in neuroscience, it turns out they know stuff about me that I don’t even know. It even has a name: neuromarketing.

Here’s a good definition of the practice from Neuromarketing, a blog focused on the field, authored by consultant Roger Dooley. (Consider that they make no secret about what they’re up to. They don’t have to. They’re that good.)

“Neuromarketing includes the direct use of brain imaging, scanning, or other brain activity measurement technology to measure a subject’s response to specific products, packaging, advertising, or other marketing elements… neuromarketing also includes the use of neuroscience research in marketing. For example, using fMRI or other techniques, researchers may find that a particular stimulus causes a consistent response in the brain of test subjects, and that this response is correlated with a desired behavior (e.g., trying something new).”

So what does this mean? That Mad Men are busy figuring out how we subconsciously process product and are tapping into parts of our brain through adverting and marketing techniques that we’re unaware of? Well, of course they are. And they’re getting better at it every day.

According to Denise Corcoran, CEO of The Empowered Business, neuromarketing recognizes that there are three “main parts” to the brain. These include, she writes at Business Know-How:

• “The ‘Human’ (‘New,’ or outer-most) Brain: Most evolved part of the brain known as the cortex. Responsible for logic, learning, language, conscious thoughts and our personalities.
• The ‘Mammalian’ (Middle) Brain: Also known as the limbic system. Deals with our emotions, moods, memory and hormones.
• The ‘Reptilian’ (Old) Brain: Also known as the R Complex controls our basic survival functions, such as hunger, breathing, flight-or-fight reactions and staying out of harm’s way.”

“While neuromarketing is still a young field with many unanswered questions, one finding is clear,” Corcoran says. “The reptilian, or ‘old,’ brain drives your customers’ [heads up people. She’s speaking here to marketers] buying decisions.” This part of the brain, now heavily targeted by in-the-know-how marketers includes, she writes, a sophisticated (not!) focus on emotions triggered by sensory stimuli, simple gain versus pain tradeoffs, and “beginnings and endings.” I’d use terms like “knee-jerk” and “super duper impetuous” to describe my reptile brain. Not really that part of me I want in charge of my wallet.

(Keep in mind, by the way, that we’re not just talking about buying product here. Lots of decisions come made by This Old Brain. Anyone around this last election day? The neuromarketers were.)

So, as we round the shopping mall turn into The Season, what are some examples of how they play us during this last month of the year? Here are two classics designed to plug into our neuro(tic?) habits, according to Dooley:

You want it? We got it! At a ridiculously low price! Just come on down and…

“A staple of Black Friday promotions is the limited quantity loss leader item,” Dooley explains. This is when a store loudly advertises a known-to-be desirable item (say, a flat-screen TV) at an incredibly low price. In fact, so low the store’s going to lose money.  Sound like a good reason to cue up? After all, the advertisements says, “At least 5,000 available chain-wide!”

A lot for a little? “This pitch is neuroeconomic perfection,” he says. “Consumers see the product, and are shocked by the amazingly low price. At the same time, neuroeconomics research tells us that people aren’t good at translating odds and percentages into real-life probabilities… most consumers wouldn’t have a clue that a particular chain might have, say, a thousand stores. And, if every store gets just a few units, the chance of actually being able to buy one is very low. Still, many make the trek into the store early on Black Friday hoping to do just that.”

What’s left behind when the smoke-and-mirrors-screen clears is what Dooley calls “an atmosphere of savings. If people are lining up at 4 AM to buy stuff, the prices must be incredible, right? This savings frenzy may carry over to other products and even infect shoppers not pursuing the limited-supply items.” Wow. Such language! “Atmosphere of savings!” “Frenzy!” “Infect!” I don’t mean to pick on Dooley, who’s just doing his job, but yikes.

But wait! There’s more!

Buy now, pay… well, who cares when? Just buy now!

Another big end-of-the-year play is to promise no payments until next year. Never mind that that might be just a few weeks away. Oh hell, you know that! How about no payments until, say, next summer? Or maybe, “No interest for a year! You can pay it off by then. Can’t ya?”

This is what Dooley calls the “No Payment, No Pain” approach, another “brain-based technique” that minimizes current cash outflow while maximizing overall cash outflow. “The possibility of immediate gratification with very little in the way of ‘paying pain’ will no doubt close more deals. (The mere enabling factor of these offers is important, too; some consumers simply can’t pay for the product in full.)” Again, note that this marketing consultant is talking to The Man (or Men or Women, or whoever wants you cash) and not to you.

So yeah, buy now, pay later. From the mouths of neuromarketers: “Some of these financing offers make sub-prime mortgage lenders look downright sensible and cautious.”

Enough. We and our oh-so-easy-to-read brains get the drift. Many of us are no match for the cross-fire of high-level sales techniques. (As a cha-ching FYI, an estimated $45 billion was spent at retail stores on Friday and $1 billion was spent online Monday.) I say, though, that a little awareness goes a long way. So heads up out there in the marketing kill zone this season. Consider the value of your own (In the) Black January and opposed to surrendering to your inner reptile.

Image: Oran Viriyincy

The post Beyond Black Friday: Neuromarketing, Your Brain and Your Wallet appeared first on EcoSalon.

“I will sell this house today!” affirmed a manically confident Carolyn Burnham in American Beauty. Donning rubber gloves, the anal agent spruced up the Formica and tile, trying to get the hopeless dud she was saddled with to sparkle.

These days, agents still mired in the recession also contemplate how to simply get buyers in the door, and curb appeal is everything when it comes to this lure. These five fixes can make a big difference:

1. Leaner and Cleaner Landscape

If the entrance has a patch of grass, make sure it is manicured. Too many agents and homeowners simply let the grass grow under their feet while waiting for a home to sell and the once landscaped lawn becomes a major turn off to potential buyers, unless of course they are hippies who like overgrown grass. It also helps to replace some of the water sucking plants with drought resistance cactus, and other xeriscape choices that show off your conservation commitment.  It also spells low maintenance!

2. Fresh Coat of Exterior Paint

Paint is the one fix that goes the distance since buyers really do judge a listing by its cover.  Go with an eco brand like Benjamin Moore and select a popular neutral, cream, white, beige or taupe with pretty trims (greens, browns, reds, blacks).

3. Eliminate all Debris and Encourage Neighbors to do the Same

I fell in love with a charming Mediterranean cottage in a desirable hood of San Francisco and probably would have made an offer if it were not for the butt-ugly neighboring homes spilling over with car and lawn equipment and other debris. It was shocking how one side of the street was pretty well maintained and the opposite site was a blight. Make cookies to bribe your neighbors into helping you with the cause by cleaning up their acts. In the end it will boost the value and saleability of  their homes, as well.

4. Patch broken Concrete, Bricks and Tiles

Unless you are marketing a diamond in the rough, it pays to invest in repairing broken chimney bricks, cracked concrete drive ways and flagstone steps. It makes a statement about how you have maintained the inside of the home, just as a well groomed physical appearance often spells a healthy internal system.

5. Clean Windows

You can do this yourself with a sizeable ladder and the right materials or hire a neighborhood service to come out (they usually charge per window) right before you put the house on the market. Weather will dirty them again, but the cleaning should last a couple of months and add also make a statement about the condition of the home. Filmy windows are a deterrent for getting curious lookers inside, unless it is Halloween.

Photo credits: Main image of “Painted Ladies” opposite Alamo Square in San Francisco, licensed for commercial use under Creative Commons by Marit and Toomas Hinnosaar on Flickr.

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Hey couture cats waiting around for the summer sales to start, get your purrs revving with these highly coveted pieces now yours for a steal.

This Cowl Wrap Dress from Bahar Shahpar has such a great shape and pattern. Envi is offering it for $189, down from $378. Bring it.

Cow Jones Industrials offers these Cri de Coeur peep-toe flats in blue chambray for $60. Not quite white, not quite denim, these pumps will be chameleon-like to go with many an outfit.

Imagine this sleeveless a-line dress (with side godets and front placket pockets) post beach. Imagine a belt on it, glittery shoes and drapey jewelry. Designed by Turk + Taylor, the Anchor Bend Dock Dress is a silk organic cotton stripe with silk lining and offered in San Francisco’s sweetest boutique ever, Doe.

Umm, it’s $44.

The post Stylish Steals: Cri De Coeur, Bahar Shahpar and Prairie Oh My! appeared first on EcoSalon.

A Bay Area family talks of moving to Portland, Oregon where they have friends and family and can secure a nice-size house and even land (what a concept!) for what it might cost to buy a two bedroom condo in San Francisco. But it just doesn’t seem to be the right time to sell the 40’s era family home Gary Hauser grew up in, and now shares with his wife and daughter. It also doesn’t seem to be the right time to invest in something new. The answer? Rent with no repent.

“We’re thinking of renting out our house while renting something either in Portland or an apartment in a sunnier location in San Francisco until the market picks up,” Hauser says. He may be onto something as renting could very possibly be replacing buying as the new American dream.

Rental Savings

There are strong arguments for renting instead of buying including the steady climb of mortgage interest rates along with the difficulty in securing in loan.

Rising Rates

An average 30-year-fixed went up 12 basis points to 5.23 percent April 1, while a 15-year fixed climbed to 4.53 percent and a jumbo 30-year fixed loan jumped to 5.92 percent. And while housing prices might be lower, renting costs have dipped as well, making it easier to get a better deal on a nice house in an upscale hood.

“It’s just a chain reaction since properties are going down in value, the property owners will eventually lower their rent to keep up with the market,” says Stop Stupid Stuff, a mortgage tutorial site.

While more people may be able to afford buying right now, the mortgage sites argues you can actually save a great deal by renting in certain locations.

“Some would argue that the difference in mortgage and rent is not that much that makes renting a bad idea but if you are living in a posh location where the mortgage could reach $5,000 a month, you will be able to rent a property within the same location with less than $4,000 a month,” it tells us. ” The $1,000 difference per month is just too large to be ignored.”

According to James L. Harrison of the Real Estate Blog, if you can afford not to sell your home, you can benefit from a steady cash flow that you can apply to your expenses and taxes while retaining ownership and making a profit. If you are relocating, you avoid the risk of selling and losing money, and can simply enjoy the income until you come back. He argues you also unload a lot of headaches assumed by the renter.

“You shall no longer have to pay the mortgage interest payments, insurance payments, property taxes, maintenance, repair and cleaning services,” he says. “You might be surprised to know that all costs of collecting your rent like traveling, local transportation, maintaining, and repairing your rented property can be deducted form the tax. Moreover, the depreciation expense is also taken care of my the amount of rent that you are getting. Hence, you have a good tax shelter, and save a lot of money.”

Disadvantages to Renting

Playing Landlord

The biggest disadvantage is having to play landlord, according to Alla Gershberg, MBA and a principal with the Paragon Real Estate Group in San Francisco. “Managing a rental house and tenants can be a hassle and cost a lot if you choose to hire a professional property manager,” she finds.

She adds that once you decide to sell, it can be tricky. “If you decide to sell because of rent control laws, evicting tenants to sell the home later may be problematic, prohibitively expensive or even impossible. If it’s impossible to evict the tenants, then you have to show it while it is tenant occupied, which can bring up multiple issues pertaining to appearance, showings and open houses. It makes it virtually impossible to perform any staging of the home to make sure it shows in its best possible light.”

She adds that rental properties rarely show as well as owner-occupied properties and renters often neglect basic upkeep and maintenance. Agents also find most buyers don’t want to buy tenant occupied homes and those buyers willing to deal with the issue expect a significant discount on the price.

“Renting for an extended period may affect the $250,000-$500,000 exclusion from capital gains for ownership occupied properties upon sale.”

Like most agents, Gershberg discourages clients from putting off selling homes  because it can be difficult to predict when the market will actually pick up, and meantime, the rental market also can weaken at the same time. She figures in terms of making an investment, you will probably fare better in the end from selling.

“It depends on the property,” she shares. “Rents in good neighborhoods are doing well but unlike multi-unit rental properties, single family home rents typically don’t generate income commensurate with current values. In other words, you could invest the proceeds of a current sale more profitably than the return one gets from rental income on a single family home.”

Renting a Room, Good Compromise

Until you decide about renting or selling, it might pay to simply rent a room in your house to eke out some extra income, just as our grandparents did during war time and the Great Depression. It will also give you a sampling of what it is like to play landlord, including collecting monthly rent and asking your tenant to do his or her part to keep up the room and shared grounds. Just follow the m.o. of best landlords, and do a good background check!  Remember, you can also take something in trade for that great green gardener, organic chef or babysitter that happens to need a room. It could be a great win-win situation.

Images: The Truth About…, All starplr, TV Rage

The post Rent Now, Sell Later? The Benefits In a Still Shaky Market appeared first on EcoSalon.

Read all about it! Entertainment Weekly has published the first video advert with built-in speakers to get the attention of readers conditioned to respond to screens.

A report by the BBC explains the screen is built into a wafer-thin, cardboard insert and contains an ad for Pepsi Max, as well as trailers for CBS television.

“This is an extraordinary way to refresh how we interact with consumers,” said Pepsi-Cola’s chief marketing officer, Frank Cooper.

Desperate ploy, marketing breakthrough or annoyance? The chip technology, which holds up to 40 minutes of video, is likened to those singing greeting cards which have gained popularity. They are activated when you open the card.

The cardboard can add bulk to the magazines, and some male consumer have already complained it makes it hard to roll up a journal and stick it in your pocket.

BBC News‘ Los Angeles correspondent, Rajesh Mirchandani, says the magazine advert is mounted inside a cardboard insert and is instantly distinguishable from a normal flimsy page.

“You can’t really flick through the magazine, because the 4-page insert that includes the video screen is relatively bulky,” he reports.

“And when you do open up the relevant page, the actual advert takes several seconds to load and play and that’s a lifetime’s lag in the advertiser’s world,” he added.

Magazine containing the screens have been sent to several thousand subscribers in Los Angeles and New York. Will they catch on by other magazines to save the trade? We shall see.

Some other facts about the adverts:

The post A Screen Inside a Magazine to Lure Readers appeared first on EcoSalon.

Bottled water sales have dropped for the first time in at least five years as a result of  vocal environmentalists sparing the landfill and a recession that has consumers giving tap water a shot.

Americans drank 8.7 billion gallons of bottled water last year, compared with 8.8 billion in 2007, according to consulting firm Beverage Marketing Corp. This is the first decline this decade, signs the Siggs and advocacy groups are making a dent. (Here at EcoSalon, we’ve encouraged readers to Stop the Bottle in 2009.)

According to a report in the Los Angeles Times, Nestle, the largest seller of bottled water in the U.S., reported its profits fell 2.7% the first half of the year. Nestle sells Poland Spring, Deer Park, S. Pellegrino and Perrier. And while the corporate giant peddles many other brands of food, bottled water was the only sector failing in global sales during the first half of the year, down 2.9% because of weakness in the United States and Western Europe.

“I thought we’d never be able to impact sales of bottled water, and all of a sudden it’s really gained momentum,” said Wenonah Hauter, executive director of advocacy group Food & Water Watch. “I think we’re making real progress.”

The progress has resulted from campaigns launched by consumer advocacy and nonprofit organizations to educate consumers about the massive waste and environmental damage caused by plastic bottles. According to Food & Water Watch, people are wising up to the environmental costs of bottled water: production consumes energy and emits toxic chemicals; transportation guzzles oil, generating pollution; and disposal amounts to littering, with 86% of all bottles put in the garbage instead of the recycling.

The figures are a welcomed departure from last year when bottled water ranked America’s third most popular beverage (followed by soda and milk) with sales exploding 59% from 2003 to 2008, making it one of the fastest-growing beverages. Surveys show 70% of consumers drink bottled water.

Americans drank 8.7 billion gallons of bottled water last year, compared with 8.8 billion in 2007, according to consulting firm Beverage Marketing Corp. This is the first decline this decade.

Image: elNico

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