The term “Bargain Basement” refers to a specific retail concept where discounted merchandise is sold, often situated in the basement of a larger main store. Originally, these sections were used to move unsold inventory at reduced prices, thereby freeing up space for new merchandise. Over time, the term has evolved and is now also used to describe stores that exclusively deal in discounted or clearance merchandise.
Historical Context
Origin
The concept of the bargain basement is believed to have originated in the early 20th century, primarily in large department stores. These sections were generally located in the basement of the store to attract value-conscious customers without displacing the full-price merchandise on the main floors.
Evolution
As consumer behavior and retail strategies evolved, the idea of selling discounted items expanded beyond department store basements. Retailers began opening standalone stores specifically designed to offer bargains, leading to an increase in the popularity of discount stores and outlets.
Types of Bargain Basements
Traditional Bargain Basements
These are typically found within larger department stores and are positioned underground to separate discounted merchandise from premium offerings. Traditional bargain basements often carry a mix of off-season, overstock, and returned items.
Standalone Discount Stores
Retailers specializing in discounted goods often adopt the term “bargain basement” to signify their primary business model. Examples include outlet stores and discount chains like Dollar Stores and clearance centers.
Special Considerations
Inventory Management
- Markdown Strategy: Retailers must establish a systematic approach to markdowns to ensure merchandise is moved efficiently.
- Product Lifecycle: Understanding the lifecycle of products helps in determining when to transfer items to the bargain basement.
Consumer Psychology
- Bargain Hunting: Consumers often enjoy the thrill of finding a good deal, a phenomenon retail psychologists refer to as bargain hunting.
- Perceived Value: Proper marketing and display techniques can enhance the perceived value of discounted items.
Examples
Case Study: Macy’s Basement
Macy’s has long been known for their bargain basement sections where seasonal and overstock items are sold at significant discounts. This allows Macy’s to attract budget-conscious shoppers and efficiently manage inventory turnover.
Outlet Malls
Outlet malls, though not technically basement-based, operate on similar principles of offering brand-name merchandise at reduced prices. They essentially serve as large-scale bargain basement formats.
Applicability in Modern Retail
E-commerce Adaptation
The concept of a bargain basement has also made its way into e-commerce. Online retailers maintain clearance sections on their websites for discounted items, leveraging the same principles to attract bargain-seeking consumers.
Pop-up Stores and Sales Events
Temporary retail locations, such as pop-up stores or flash sales, often utilize the bargain basement model to quickly move inventory. These events capitalize on the urgency and excitement associated with limited-time discounts.
Related Terms
- Clearance Sale: A sale intended to clear out excess inventory.
- Outlet Store: A retail store selling merchandise at reduced prices, often directly from the manufacturer.
- Markdown: The reduction of the original price of an item.
- Discount Store: A retail store that sells goods at lower prices, often by purchasing overstocks or closeouts.
FAQs
Why are bargain basements usually located in the basement?
How do modern retailers use bargain basement principles online?
Are all items in a bargain basement of lower quality?
References
- “The Science of Shopping and Stores” by Paco Underhill
- “Retailing: Principles and Practices” by Patrick M. Dunne and Robert F. Lusch
Summary
The concept of the bargain basement has been a staple in retail for over a century, evolving from a simple clearance space in department store basements to a significant aspect of the retail economy, including standalone discount stores and the digital marketplace. Understanding its role in inventory management and consumer psychology remains crucial for retailers looking to appeal to bargain hunters and efficiently manage their merchandise.
