On Economic Principles and the Barney’s Warehouse Sale

Semi-Annually Barney’s holds its warehouse sale at the Co-Op location conveniently located on 17^th street and 7^th avenue in Chelsea. Hordes of shoppers flock to find deals, whether it is that men’s two button Jil Sander suit, a pair of Louboutins, or a more haute-couture piece that doesn’t quite fit well and was scuffed in transit and was inevitably an expensive mistake.

I have been attending the warehouse sale for a few years now. I self describe my style of dress as classic and style conscious with an affinity for craftsmanship and detail. Over the years I’ve had some great finds; a Burberry trench, a classic pea coat, a Margiela button down, and a Band of Outsiders suit to name a few. Factoring in a few purchases that didn’t really work out I’ve probably saved as much as I have could have buying at the proper end of season Barney’s sale and could have traded shopping in a controlled and sane environment for trying on clothes in the corner of the Chelsea passage. I always stop in and like to take in the maelstrom that is the Barney’s Warehouse sale.

This year I went to browse and noticed a few things. Some of these things were blazers, some were economic principles.

Pre and Post Price Expectations:

Everyone forms price expectations in making a purchasing decision. The expectation of price becomes a reference point of compare that influences the propensity to buy a product. In the case of the warehouse sale we are exposes to both pre-price expectations and post-price expectations.

Pre expectations would dictate what we would expect to pay for a Dior shirt and post price expectations would factor in our expectations to purchase a Dior shirt at another occasion, after being exposed to the Barney’s warehouse price. The forward looking expectation is typically more responsive in reacting to store prices in forming price expectations. I believe this is accentuated for discounts on luxury brands.

“When is the next time you are going to find Lanvin on sale” or the infamous “Chanel never goes on sale”

This concept of a ticking-time window for the deal becomes very important. The cramped and crowded mob environment of the sale makes you ponder the time when your “future self¹” will not only want this item, but also have the money. This sense of pressure, time, and desire for exclusive goods is a driving force why Gilt is one of the fastest expanding sites.

The Effect of Price Framing: Deal versus Sale:

I was thinking about how different generations talk about shopping. My grandma very much enjoys getting a sales price at the supermarket. To a point I believe she thinks she is pulling a fast one on the supermarket for some reason. I recall a time when I mentioned that I enjoyed an occasional ginger-ale. A week or so later ginger-ale went on sale with a maximum purchase of 2 per customer. My grandma decided it would be prudent to go back and forth and make separate trips to stock up on ginger-ale for the apocalypse so I could have a refreshing beverage. I think the majority of the bottles went flat years ago.

The diction has changed. The word choice of “sale” has this association of “cheap” and of “diminished quality or value.” The deal is for the savvy. The deal is for the individual who has done the research and is making an informed decision on both price and quality. There is a semblance of pride in being able to snag that luxury piece at a most favorable price.

Luxury goods are prone to framing the sale as a deal. Designer goods often have very high margins as a layer of the cost is the design and not a cost of goods sold component such as leather.

This is the point in the blog post where I have more ideas and graphs on the subject but instead I am going to provide a punch recipe.

Punch is great at parties because it:

• Can be prepared in a large quantity prior to the party where diligence and time can be devoted
• Classic punch recipes are very tasty, awesome, and quite alcoholic
• Those crystal punch bowls or fountains are very cool
• Inspires a group atmosphere and festivity as everyone is in the same proverbially boat (or drink)

Below is an alt on a classic punch² recipe. The addition of rhubarb is great for parties in the spring. Poire Williams is great substitute for applejack for a fresh flavor.

Mother’s “Apple Rhubarb” Ruin Punch

• 10 cubes of brown sugar
• 3oz soda water
• 3oz fresh squeezed lemon juice
• 6oz fresh squeeze grape fruit juice
• 3oz Carpano Antica Vermouth
• 5 tea bags of earl grey tea
• 1 stick of cinnamon
• 6oz of Plymouth Gin
• 2oz of Applejack
• Split of champagne
• 6 drops of Rhubarb bitters
• 1 grapefruit

Recipe:

1. Earlier in the day place the tea bags and the cinnamon stick in the Carpano Antica bottle. Let sit and chill
2. Earlier in the day fill a bread loaf pan with water and freeze. When this freezes it will create ice. The ice cube will be about the size of a loaf of bread.
3. Coat the sugar cubes with the drops of bitters and muddle with the soda water
4. Use a chinoise to strain 3oz of vermouth
5. Combine all of the ingredients except for the champagne
6. Place the big giant ice cube in the center
7. Stir the mixture and garnish with slices of grapefruit
8. At the appropriate time add the champagne and gently stir
9. Serves 1-2 people

footnotes:

¹ I too often let future jason deal with problems
² Punch dates back to the 1600s, predating the term cocktail by over two hundred years. Punch literally translates to "Five," referring to the five original ingredients of sugar, tea, lemon juice, spices, and spirits