Various discount stores try to create excitement and time pressures that drive consumers to buy at that very moment, or else risk losing out to some other bargain shopper. A relatively new entrant to the market does more than just imply that people better hurry; it makes that premise the defining aspect of its entire pricing strategy.
Even though its name hearkens back to old-fashioned promotions (e.g., “Come on down to Crazy Larry’s car lot!”), Crazy Cazboy’s promises a novel approach to closeout sales. The prices are clear, evident, and consistent: Everything starts off at $7. Buyers thus know exactly what they will be paying on that particular day. But they also know that if they want to risk it, the next day, all the items will be available for $5. Over the course of each week, the price keeps dropping, until on the last day, the items can be had for just 25 cents.
Each week, Crazy Cazboy’s gathers unwanted merchandise from scores of traditional retailers, including Home Depot, Best Buy, Amazon, and Target. It opens on Friday, sells down the bins at steadily decreasing prices each following day, and then closes on Thursdays to begin restocking for the next week. There are no guarantees or discernible organization. All the items, from books to baby wipes to refurbished iPads, get thrown together into bins, and bargain hunters must dig through them to find the things they want.
When it opened its first store in 2019, Crazy Cazboy’s invited everyone to shop, but more recently, it decided to implement a small annual membership fee of $15 per year. The popularity of the concept meant long lines each Friday, and the membership requirement might reduce such crowding. But popularity also implies that the retailer can earn a consistent source of revenue by encouraging its fans to pay for the privilege of shopping there. For single-time shoppers (e.g., people just visiting the local area), a $5 one-day membership option also is available.
Along with limiting crowding to a strategically appropriate level, Crazy Cazboy’s takes care in other ways to avoid signaling a poor quality image. It explicitly and frequently promotes the brand name products available, and it often highlights that most of the products it sells, even if discounted, are new and still in their original packaging. The stores, while somewhat cluttered, are carefully maintained and kept clean. A bright color scheme signals the fun to be had, and the bins placed throughout the store help contain a sense of too much clutter or spillovers onto the floors.
The popularity of the concept implies some other pricing considerations. It already has opened more stores, spanning Alabama, Texas, Florida, and South Carolina. Each of those stores draws thousands of shoppers, especially on the weekends, often from many miles away. Therefore, landlords and property managers are anxious to add a Crazy Cazboy’s location to their shopping centers, which would benefit the other tenants by providing a steady stream of potential shoppers for them too. Because it can negotiate better leases, by promising these added benefits, it can continue to keep its prices low. Not so crazy after all, it seems.
Discussion Questions:
- What distinguishes Crazy Cazboy’s discount strategy from those of other discounters, like TJMaxx, which also tries to evoke excitement through a treasure hunt approach?
- Can this model spread throughout the country? What are some potential limitations on its growth?
Source: Matthew Stern, “Is Crazy Cazboy’s Pricing too Crazy or Just Crazy Enough?,” Retail Wire, May 16, 2019; Marianne Wilson, “Mega-Discounter Crazy Cazboy’s Puts Unique Spin on Closeout Retailing,” Chain Store Age, March 29, 2021; Teresa Gubbins, “New Chain with Crazy Discounts Opens First Texas Store in Arlington,” Culture Map Fort Worth, March 26, 2021