Addition by Contraction: Major League Baseball Takes a Lesson from Retail
There are many merchandising techniques available to retailers which are designed to increase sales and maximize profits. One in particular offers the valuable bonus of increasing store visits. This, centers on limited or intentionally limiting quantities.
Odd-lot/Close-out retailers such as Big Lots are champions/victims of this practice. Champions, because regular customers are aware that many of their retail offerings, especially those newly in stock, are often one-time closeout purchases. When they sell out at the store level, these values may never be seen again. This creates a very enviable buy-now atmosphere.
Victims at times however, because retailers are in business to sell product as efficiently as possible. Retailers fear having to tell disappointed returning customers that the item they were seeking is likely not to be available again, at least for the price which was being promoted.
Traditional dollar stores see this situation all the time. Even at a single price Dollar Tree store, it is common to hear a store associate telling a saddened customer that the store is sold out of a requested product and it is unlikely the item will return to the shelves, at least not any time soon. From the retailer’s point of view, it is hoped shoppers come away with a lesson learned and will stock up on such purchases in the future, making the selling cycle more efficient.
Shoppers visiting off-price apparel retailers such as Marshall’s, TJMaxx and Ross Dress for Less are generally well aware of the ground rules of limited in-store supply and know that when a particular item is sold, that exact piece may never be seen again. This is especially true within the growing housewares sections these retailers offer.
With these retailers, apparel SKUs are often limited to a count of one to three per style in a particular size. Few of these exceed three per store on arrival. Many never reappear. This scarcity is the happy result of the natural limits of odd-lot/closeout retailing. This result of this aura of scarcity often creates a type of anxiety on the part of the devoted consumers who contemplate taking advantage of a particular bargain or simply hope to save money on necessities during difficult economic times.
While these retailers ride this platform of product limits as a historical result of their particular means of business, other retailers promote scarcities, at times creating them where they actually don’t exist. Television based shopping networks are a prime example of this.
Their ‘show hosts’ often stress supposed limits on ‘available’ quantities. They seem to constantly stress that an item is about to ‘sell out’ prompting a feeling that the viewer must jump on the bandwagon or be left behind. If the product is on an initial airing and not likely to sell out any time soon, viewers are warned that products are limited in favorite sizes or colors. Seemingly anything is in play to goad the consumer to action.
Of course, these products are generally available for multiple viewings. Products, if successful, are likely to be brought back for future airings. But the practice is to force the sale now.
Other limitations pushing immediate TV sales include one-day discounts or temporary offers of free shipping. However, viewers can follow a type of showrooming for TV retailing by visiting retail stores or surfing online. These often reveal more attractive pricing and a greater diversity of brands with additional product attributes and no shipping charges. Additionally, at the store level there are no costly shipping charges on returns.
Last week included opening day ceremonies for most fans of Major League Baseball. In recent seasons baseball attendance has grown at most levels, especially on the major league front. This growth has emerged despite the slow recovery from the recession, skyrocketing player salaries and ever-rising ticket prices.
Listening to a summary after opening day games had been completed for most MLB teams, I wondered if I had heard correctly. It was announced that the Tampa bay Rays won before a sellout of just over 31,000 in attendance. I was pretty sure that capacity for the home of the Rays, Tropicana Field was closer to 35,000. Later I checked the figure and it was confirmed that the attendance for the home opener was an exact sellout at 31,042.
On further checking I discovered that indeed the capacity of the Ray’s home, Tropicana Field had been 34,078 for the previous three seasons. That capacity had been reduced prior to this season, to make room for significant fan friendly upgrades. Prior to the 2011 season, the capacity had been just under 37,000. When major league baseball commenced in Tampa Bay in 1998, Tropicana Field had a capacity of over 45,000.
It seems that Rays management was contracting capacity to make the domed park a more urgent visit for fans as it was creating an atmosphere of scarcity for game tickets. After the game, Rays’ manager Joe Madden noted the sellout and indicated that he was appreciative of not having lots of blue in sight- empty seats.
Having suffered a wealth of blue during too many home games throughout the Rays’ history, no one could blame the manager for his ‘easy on the eyes’ comment. Perhaps the Rays organization had finally figured a way to cheat weak attendance figures by creating scarcity through contraction.
The next three nights however, featured games at the Trop with anemic, steadily declining attendance totals of 11,113, 10,808 and 9,571, against division rival the Toronto Blue Jays. The latter three games drew just 450 more in combined total attendance that the reduced capacity, sold-out opener. There was lots of blue to be seen and it was glaring.
The stadium’s condensed capacity should help sell tickets in advance to games which on their own may approach sellout. These games would likely include those against popular rivals, especially the New York Yankees and the Boston Red Sox. But fans should not need an extra incentive to attend these games, especially as there are many natives from these areas having relocated to the Tampa Bay area.
Based on attendance figures of the first four games, it would seem that diminished stadium capacity may only serve to boost advanced sales for already in-demand contests. If many games ordinarily draw attendance at about a third to half of capacity, the diminished number of seats available may only serve to limit attendance for the few games which might normally exceed a sellout.
The Tampa Bay Rays organization seemed overjoyed to announce a sellout. However, the Rays opening day announced attendance was exactly at capacity. It is common for teams to announce attendance figures exceeding capacity for especially big games, as was the case with several MLB clubs on opening day. That the Rays were only able to exactly meet their capacity figure, likely indicates a struggle to reach even that diminished goal. In this case contraction only served to dress up the attendance figure rather than attract a greater frenzy of fans.