Book Review: Cheap: The High Cost of Discount Culture

This I Wear | Cheap: The High Cost of Discount Culture

Welcome to 2014! Lazy days spent with family offer the perfect time to catch up on reading, so we’re kicking off the New Year with a new read! Enjoy!

“In the world of Cheap, ‘design’ has become a stand-in for quality.”

In today’s shopping world, the middle ground is gone. Our options seem to be luxury goods that cause us to be suspicious of price and discounted (but “designed”) items that give us suspicion of quality. As consumers, we often feel manipulated when we shop, because we don’t actually know what we are buying. In fact, according to Shell, “we believe that merchants habitually overcharge us just because they can, and the difference among products represents not a difference in quality but in the varying ability of salesmen to fool us.”

Why are we so suspicious? And is our suspicion warranted?

Ellen Ruppel Shell’s book, Cheap: The High Cost of Discount Culture, indulges our greatest consumer fears that retailers are taking advantage of us. Starting from the history of the department store and down to the invention of the price tag, she follows the growth of our cheap-obsessed American culture.

Honestly, after reading this book, it feels like unless I buy all of my clothing from that price-transparency movement starter Bruno Pieters, I may never know if the cost of my clothes is the result of the price of the materials, the skill of the labor, the import tax, or some concept of “good design” (which in the case of “cheap” is design for disposability).

So why the pursuit of “cheap”? Well, it’s a long (well-researched) history, but this is what’s going on behind the price tag:

Prices are influenced by emotions, not just concrete numbers. And since human beings are pretty irrational, our emotions get a lot of attention from retailers. According to Shell’s research, “a fair price…is one that is ‘emotionally okay’ with the person doing the buying.” Some of this is pretty visible in stores, hence why $2.99 is more common than $3.00. But what about the fact that humans have a really hard time predicting the needs of their more rational future self? Well, we might not be so conscious of that, but it’s why a deal feels so good now. We don’t necessarily know what things are worth or what will make us happy or fill a need, but we do know how we feel when shopping. And a deal appeals to those emotional highs and lows. Our emotions get played to and suddenly, we’ve bought what the store wanted us to buy rather than what we truly needed.

We assume getting a discount “involves a trade-off of quality for price” whether it’s true or not. Even though we’re chasing deals like alcoholics going after their next drink, we actually don’t like the stuff we buy on sale as much. HUH? Think about it: if we buy something that has been marked-down, we start looking for flaws. Of course, something is wrong with it if no one else wanted it and it’s been left on the shelves. And that means that even something on sale that is of good quality has a lower perceived value, which influences how we treat it. According to Shell, “the less we pay for something, the less we value it and the less likely we are to take care of it, with the results that cheaper things – even if well made – seem to wear out and break more quickly.”

We like brands because we are looking for markers of quality, something (anything!) to explain the price. Most of us have no idea what we’re buying when we’re shopping, but a brand name has historically been a reference for quality. In fact, the idea of a brand or marker of quality is the only thing that overrides the previous point: “Once quality is assumed – as it is for many branded products – a lower price is a plus. When quality is in dispute, as it is when we buy things we know nothing about at flea markets or eBay, low price can be a negative.” So we don’t mind buying our Polo shirts for 75% off, but that Persian rug on eBay better be freaking expensive, otherwise it is obviously no good.

And speaking of discount goods, outlet malls are complete crap. Yes, they started off as a mechanism for getting rid of unsold, damaged or irregular merchandise, but now, most chain stores are designing and producing lines for their outlet stores. Yet, we’re still willing to get in our cars, drive hours, and spend an entire day after the pursuit of a deal. Why? Because we think that because it’s no frills and inconvenient, we’re EARNING a good deal. It is not a deal, guys. I REPEAT: IT IS NOT A DEAL. Don’t fall for the trap. And whenever you’re tempted by the distant glow of the outlet mall, consider the Simpsons reference Shell includes in this chapter, straight from Homer’s mouth at the outlet electronics store: “I know a genuine Panaphonics when I see it. And look, there’s a Magnetbox and Sorny.” (Don’t be Homer…)

And what is the result of all of this? We’ve been conditioned as consumers to look for markdowns, so retailers are now scared to stop putting things on sale. Oh well. I guess we’re all just human.

But Shell ends on an unexpectedly optimistic note that we as consumers can set our own standards for ourselves, demand transparency, and set ourselves free from this low-price death spiral. This optimistic conclusion was surprising given how far I felt pulled down the “all retailers are frauds” tube, but if you are a paranoid consumer or into behavioral economics, this book will have you turning page after page. I, for one, thoroughly enjoyed it.

Thanks to the folks over at Well Spent for putting this book on my radar. While it’s more consumer goods focused than just fashion specific, it is hugely helpful in understanding why we buy what we do, and how the market got to where it stands today, which hopefully will inform on how we can make a change in the future. Or God help us, we’re going to run this ship into the ground.

Share your thoughts! How does price influence our buying habits in more subtle ways? Is “cheap” addictive? How can we overcome the allure of a deal?  Comment below or tweet @ThisIWear to share your views.

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