Price Drop: What If...?

Not a mock per-se, more a format idea which may have reinvigorated the channel somewhat and added some new excitement.

The Problem
Sit-Up TV had been on its knees for a good few months before its demise. They were selling tat you could pick up on the high street for a couple of quid, and charging you £8 for the honour of delivery.

The format itself had become a bit snide in a way, with "huge savings" being described from over-inflated start prices. It seems that people had cottoned on to this and resented the extortionate charges.

In the end, they went for a horrendous win/lose format which saw them refusing to sell products to people who actually wanted to buy the tatt!

My Solution
A Co-Buying format where the price drops as each person comes in.

Co-Buys are starting to become more popular on the internet at the moment - a product is available for purchase for a set time, and the price drops as more people come in.

The products would be great quality (like they were on the channel back when it started!), and the price comparisons couldn't be argued with. Honesty would be key.

There would be a cheap premium rate number to get involved - so a little revenue is made on each call, but not so much to be extracting urine out of the customer! Postage is free (or very cheap, anyway) and is not a standardised £7.99 per item.

The way I would translate this to TV is as follows:

This is the start of the drop. The phones would be locked whilst the product was described. A 5 minute clock is on screen ready for the start of the drop.


A genuine price comparison. This is where the start price comes from - an average of three real prices which can be searched for online.


The Price Drop starts. As each caller comes in, the price drops by a set amount until 75% of the stock in this particular drop is sold.

The set amount is dictated by the channel's target price (which is not revealed to the viewer until it is achieved). In this case, I've used a Groupon price to set the lowest price. As each buyer comes in, in this example the price drops by £2.62 (calculated by the start price minus the target price divided by 30 [75% of the total quantity]).


The price drops for each new buyer until 75% of the stock in the drop is sold. Meanwhile, the clock carries on ticking.


75% of the stock is sold, so the price locks. The deal stays on screen at the locked price until the quantity is sold off or the timer reaches zero.


The quantity is sold before the timer reaches zero, so the final price is displayed - which, of course, everybody pays.


In this example, the timer is running out before 75% of the quantity is sold.


And we get a timeout, so the Price Drop ends (in this example, at £400.49). Still a great deal for the buyer, but not the best deal that they could have reached if more people had come in.

***

So the "entertainment" factor is born out of the jeopardy between the quantity going down and the clock timing out. The amount of buyers genuinely dictates the saving. If there is a timeout, then the channel makes more money and the buyer still gets a decent saving.

Warehouse Clearance events would make way for "Speed Drops" which would have less time to get involved, but the price would drop even further and more quickly as the target price would be discounted.

Obviously this will never happen now, but it was just an idea I had going around my head which I think could have worked.

How could they afford to beat the average of three 'genuine' online prices when they have more overheads than most websites? Not every item can be a loss leader.
How could they explain this concept to viewers in a concise way?
There was a website a few years ago that tried this concept (www.weallgetthingscheaperifwebuyinagroup.com) but I believe they no longer exist. Of course, this may have been due to their horrible URL rather than their business model.

To answer Dave's question on the OP's behalf, you can find 'genuine' prices to suit your needs - simply by not choosing the same 3 places every time..

I think the reality is that it'd only work on high value items though - and when you're selling stuff worth hundreds there's a strong likelihood you wont sell any outside peak times. QVC will typically 'manage' that by having stuff of varying values throughout an hour of programming (for example, some software as well as a computer). The huge costs involved in TV mean you have to be selling literally all the time for it to be profitable.

Like WillPS said, you can gather any three genuine prices from anywhere really and get them to suit your needs. For the more basic products, then you'd probably go down the line of the manufacturer's RRP.

Co-buying is a thing, and several retailers are starting to do it including Tesco, Sony and Gameseek to name just three. The main provider of the cobuying format at the moment is Buyapowa - if you look at their website, you can see how it works with the lower priced items.

Obviously, online is a diifferent ball-game to shopping television. I don't see much reason why it couldn't work though - retailers always bang on about buying power, and bringing lower prices by buying in bulk, so the same principle applies here.

As for explaining it concisely, well how about: the price goes lower as more people drop in. Hmmm... where have I heard that before?! haha

The examples you provided seem to apply only to a limited range of products, basically as a special form of promotion that relies on people spreading the word. GameSeek only has one active Co-buy, for example.

To a certain degree, the concept behind it seems like a bit of a con to me - are they seriously suggesting that Tesco's buying power somehow increases when more people buy some wine? It's just a way of ensuring a promotion's success, and a pretty naff one at that - the game on GameSeek can be acquired cheaper at quite a few other places.

In the case of price drop, because of the shorter time limits, I reckon the high price would put many people off, in case the item isn't popular. Additionally, what happens if a buyer drops out? There's no guarantee of purchase like the BuyaPowa version.

Looking good, but what is a 'cheap premium rate number'?

I like the idea. However, the company were in debt, so they wouldn't have enough money to buy all of the expensive stock and to sell it at a low price. If they did make some profit, it probably wouldn't have been enough for them to begin paying off the £68million of debt to the suppliers they bought from. Plus, with their substantial debt, many suppliers would reject their orders.

I love the format, and if the company payed attention to their staff and customers, they could have incorporated an excellent format, similar to yours.

4/5