The Great Metamucil Fiasco

All right, so last spring I told all of you about the Great Prune Fiasco of 1994, and how I had a front-row seat for it. You can read all about it here , if you want to, but basically it was a loss-leader item that blew up in the face of the drug store company that ran it -- or at least in the faces of several of their stores, where prunes, far from being an unpopular item that could be offered at a dramatic discount, were actually one of the most popular food items available, and were suddenly being grabbed in vast quantities. In the end, I wound up selling the equivalent of about 14 cargo pallets worth of prunes in less than a week, and I honestly believe that I could have unloaded 40 or 50 if Corporate had sent them to me when I asked...

I called it a fiasco, and still do, because this is not how as loss-leader promotion is supposed to work -- in the same sense that the ocean is not supposed to be above the clouds. A loss-leader is an item which the seller (usually a retail store) offers at or below cost for the purpose of drawing customers to the store, in the hopes of then selling those customers some additional merchandise that has not been discounted. The loss-leader item can be almost anything, although if it is something highly desirable the store needs to place a hard limit on the number available, such as "limit 4 per customer" or even "limit 1 per household." The prune promotion became a fiasco when corporate forgot to put that limit on the ad circular that they ran in a neighborhood full of heavy prune-users...

All of that would have been bad enough, but a short time later an even worse advertising fiasco hit our store involving another loss-leader product. In an attempt to increase sales of its generic "Osco" brand items, the company decided to sell a bunch of them at laughably low prices, some of which amounted to loss-leaders in their own right. One of these was the Osco-brand bulk fiber drink mix, essentially the generic form of the popular Metamucil product -- an innocuous item in most places, but a perennial best-seller at our store with its heavy demographic of elderly folks from Eastern Europe. Corporate wanted us to sell the Osco Bulk Fiber at a deep discount, one penny over cost, which made it about half its normal price and about one-third of the normal price for Metamucil, and once again, they failed to put a limit on the advertising flyer...

You saw this coming, didn't you? Well, I sure did. Our elderly customers got the flyer, thought the product being advertised was their old favorite brand-name product, and descended on the store in ravening hordes -- albeit rather slow-moving ravening hordes, with an average age of 80-plus. Upon being told that the product on sale was not the one they wanted, about a third of these customers became loudly outraged and started demanding the "real thing" at the same sale price. Another third either could not understand that the sale was on the generic (not the name brand) product or refused to admit that they understood, in the hopes that we would just give up and let them have what they wanted. Both groups insisted that they should be allowed to purchase as much as they wanted of the real Metamucil product, at the sale price, since no limit had been included in the ad flyer...

I'm not sure how many of these people actually called the Corporate 800 number to complain; if even 10% actually did, it must have been a huge number. I know that some of them came back the next day, hoping to find that we'd given in and put the product they actually wanted on loss-leader sale. There were also some who came back later in the day hoping that someone easier to bluff, bluster or browbeat would be on duty -- not realizing that Floor Managers like me worked 12-hour shifts during that time of year. It wasn't until later in the week that some of our customers apparently gave up and decided to take a chance on the generic version, figuring that much of their prescription medications were generic (and worked just fine), so this stuff might work too. Of course, they immediately started asking how much of the Osco-brand product they could get at the sale price, and some of them wanted by the cart load...

I'm not condemning the loss-leader as a promotional technique, although between the original post and this one, I suppose it must sound as if I am. I've seen it used to amazing effect, and in fact most of the loss-leaders that the drug store company put on while I was with them turned out quite well. I am saying that like any other management or sales tool, a loss-leader has to be set up and run correctly to be any use at all. Otherwise, all you are likely to get is another Prune Fiasco...