TK Maxx and D.J. Trump

Disaster! Your big cooking pot* has broken. Unusable. And you’ve got a dinner party this Friday.

So you need a new one.

Imagine there are two options.

Both the same specs – don’t worry, your beef bourguignon will taste sublime – but two different prices.

Now, I don’t know which one you’d choose.

Whatever the choice, though, I do know how you’ll make the decision. You’ll weigh up, internally, whether the price is worth the value you’re getting from the item.

Maybe you’ve been looking for an excuse to get a fancy bit of Le Creuset kit; and so it’s worth paying extra.

Or maybe you’re far happier saving the ￡150; so the EaziGlide does the job.

It’s all about owning the pot**.

Now, let me make the decision a bit tougher.

Did it change your mind?

Or at least, can you see how it might?

Suddenly, it’s not just about how we feel when owning the pot. It’s about how we feel when buying it too***. Suddenly there are two things at work!

Spending ￡249 on a pot might not be worth it. But spending ￡249 on a pot worth ￡399?!

Suddenly, you’re coming over all Donald at the top of the article.

This addition of emotion about the deal is something you can build a business on.

Don’t believe me?

Look at the share price of TK Maxx compared to a global index of retailers:

?

Every single price label in TK Maxx shows a discount. You have people go in “looking for a deal” rather than looking for an item.

The only time TK Maxx’s business model struggled was during COVID. But once the world unlocked, that desire for a deal was there, stronger than ever!

Lots of businesses talk about an economic “moat”.

If you ask me, I reckon a psychological one is even better …

*Everyone has a BIG pot somewhere. You never use it, and it’s always far heavier than you remember.

**In behavioural economics terms, acquisition utility

***Transaction utility