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Why BOGO is the Best

Why BOGO is the Best
Christina Hammarberg

What four letters stir wonder and excitement in the hearts of shoppers near and far? BOGO. Just seeing that one little acronym is enough to send some of us into a frenzy. But what's so great about a BOGO, anyway? And is it really better than just a regular sale?

First things first, though. BOGO stands for Buy One, Get One and basically means that you'll buy one item and get a second item – typically of equal or lesser value than the first – at a discounted price. Or, or maybe the second item will be offered for free. There are no official rules as to what a BOGO can or cannot offer, which means there are numerous variations on the concept, as long as there is some sort of bonus involved for the consumer. It' a total win-win, right? Well, not exactly. As it turns out, the bonus may be all in our heads. Over the last few years, several studies and reports have focused on the buying preferences of the average consumer, in order to shed some light on the value of certain deals, like our beloved BOGO.

Freebie AppealBOGO

It should be no secret that retailers use sales, coupons and other bonus offers to get us to buy their products and services. We all love the idea of get something for nothing, or as close to nothing as we possibly can, which is why we also love BOGOs. The appeal of the freebie is nothing new: William Wrigley, Jr. is often credited with pioneering the concept of BOGO craze in the 1890s after he began offering free packages of chewing gum with every product that he sold. The free offer became so popular, and the demand for the gum became so great, that Wrigley eventually gave up on his other product endeavors and focused solely on manufacturing chewing gum.

Is It All in Our Heads?Bogo 2

As it turns out, the thrill we get from stacking two, or even three BOGO coupons to score free toothpaste is real, even if the deal itself isn't entirely sound. Retailers are often scrutinized for designing BOGOs so that the customer perceives that he or she is getting a discount, but in reality they are still paying full price.

In 2013, the Journal of Consumer Research [http://www.ejcr.org/] reported that, according to the results of a consumer study, labeling a product or service as “free” may actually increase its perceived value, more so than if that same product or service was just on sale. This study also looks at the psychology behind discounts versus freebies, and why one is more appealing than the other. In a nutshell, if something's on sale, it triggers an unconscious response from the shopper that there's a specific reason for the discount, such as a decreased worth of the product. The free item offers then become, subconsciously, a reward for making the purchase. And receiving a reward in turn makes us happy, and we want to do it again. In short, free is a powerful word.

The AMG [http://www.ala-national.org/assets/research_center/Hot_Topic_BOGO_freeFINAL.pdf] received a similar response to their market research that specifically focused on Buy One, Get One offers. More than half of consumers who participated said they prefer BOGO FREE promotions over other BOGO promotions. Buy One-Get One 50% off, Buy One and receive a monetary discount (cents or dollars) Off One Item, or even Buy One-Get a different Item Free, just didn't get them fired up like a true BOGO. Some consumers responded that this was because they “like free stuff.” Many also responded that a freebie made them feel like they were getting more than what they are paying for.

BOGO Bottom Line

Are BOGO deals worth buying into? Most economists would disagree. However, as consumers, our ongoing obsession with them says otherwise. There seems to be limitless potential in those second shirts, pairs of shoes or free tubes of lipstick. It's like a reward for doing something that we were going to do anyway: go shopping!

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