An elaborate advertising prank by discount retailer Payless ShoeSource is raising eyebrows and important questions about the ability of marketers to manipulate consumer behavior. The ruse took place in a mall near Los Angeles, where a select group of social media influencers were invited to a private launch party for new Italian shoe designer Bruno Palessi. But after the fashionistas paid hundreds of dollars for what they though was fancy footwear, they discovered they had been duped.
Payless pulled off the marketing ploy to highlight its newest shoes, which are inexpensive designs available at its stores. After making the purchases, shoppers were taken into a back room, told of the trick and given the shoes for free. Cat Chang, a fashionista who attended the event, told The Washington Post that Payless “had us fooled, like completely.” But it made her rethink the Payless brand and she plans to visit a store soon. The idea came from a Brooklyn marketing company, DCX Growth Accelerator, which specializes in what it calls “cultural hacking.”
Although the stunt was designed to draw attention to the Payless brand, it has wider implications. The Knowledge at Wharton radio show on Sirius XM invited Wharton marketing professor Barbara Kahn and Ludovica Cesareo, assistant marketing professor at Lehigh University and an expert on the luxury market, to discuss the lessons marketers can learn from the stunt. (Listen to the podcast at the top of this page.)
1. Pulling Off the Perfect Prank Like Palessi Takes Planning
When the social media influencers were invited to the fake grand opening for Palessi, they had no reason to suspect they were being duped. That’s because Payless planned every detail, right down to the labels in the shoes and the lighting in the store. The event was held in a defunct Armani store inside an upscale shopping center in Santa Monica, Calif. The company hired interior designers to transform the space with gold mannequins, winged statues and a mini runway. The products were sparsely placed, just like in a real boutique.
“They did an incredible execution,” Kahn said. “The location they picked, the way the store was set up, the way they filmed it, the way they highlighted the shoes themselves while hiding the original brand and [adding] this very clean black-and-white logo. They did a fantastic job, from Payless’s perspective.”
Cesareo said the prime location, which the company rented for six days, was a main factor in the success of the ruse. The mall is home to labels such as Louis Vuitton, Michael Kors and Tiffany.
“Your perception really frames your expectation of the quality.” –Barbara Kahn
“From a branding perspective, you would think only a brand of that caliber could fit there,” she said. “That’s why it was so smart, because why would you ever suspect those shoes were from a cheap, low-end shoe company if they could afford to launch this new brand in this incredible place?”
2. Luxury Is Hard to Discern
The Palessi prank says something very powerful about consumer behavior: When it comes to quality, perception is reality. The shoppers believed they were purchasing luxury footwear because they were fed an array of social and environmental cues, not because of the shoes themselves.
“Your perception really frames your expectation of the quality,” Kahn said. “Even in normal, mundane products like shoes, the ‘taste’ of the product is influenced by the packaging. Essentially, what Payless is doing here is [using] very fancy packaging that’s clouding the judgment of the consumer in evaluating quality. We know that this is something that’s going to happen in every single product category. It’s a very astute expectation of consumer behavior.”
Payless products typically sell for less than $40. Most consumers aren’t able to discern premium construction from less expensive materials just by holding a shoe, especially if the product is styled to copy a luxury brand. The proof of quality is in the wearing, which can take weeks to determine. And some customers simply don’t care about quality if the style speaks to them.
“The shoes are incredibly stylish. It’s something that Payless prides themselves on — that they do follow the latest fashion trends, and they do provide these high-fashion … shoes at a reasonable price,” said Cesareo, adding that she owns two pairs of Payless shoes that she purchased because of their unique style. “Of course, the material is not going to be the same as a Ferragamo. But then, if you look at the shoe, the heel is a stiletto and the point is nicely rounded. Those cues in that environment would still signal luxury, even to the expert eye like the influencers.”
3. Social Media Is Mighty
The success of the stunt underscores the new power wielded by social media influencers who can generate buzz about products just by featuring them on their accounts, which are followed by hundreds, thousands or even millions of potential shoppers.
“Some of the latest statistics say that 86% of women turn to social media before they make any kind of purchase, and they specifically turn to these influencer accounts.” –Lodovica Cesareo
In many ways, influencers have replaced retail marketers, fashion journalists and even designers themselves as the arbiters of style. The speed and reach of digital media have given rise to the entire industry known as “fast fashion,” which responds to constantly changing trends by pumping out cheaply made, affordable clothing.
“Some of the latest statistics say that 86% of women turn to social media before they make any kind of purchase, and they specifically turn to these influencer accounts,” Cesareo said. “They are individuals who have very high cultural capital in a specific domain, and they give their opinions about products. It makes sense for Payless to use that — especially in this digital world where everything is passing through your Instagram account.”
According to Kahn, one reason the Palessi prank worked from a social media angle is because the videos, which were made into commercials, show the gut reaction of the influencers the moment they discovered they were duped. “They made something surprising and emotional, and therefore it’s much more likely to be posted,” she said.
4. Publicity Is Priceless
The headlines for Payless haven’t been positive in quite a while. The company filed for bankruptcy in 2017 and emerged several months later after closing nearly 700 stores. Like many retailers, the firm is threatened by online competition, too many locations and an outdated business model.
That’s why the publicity garnered from the marketing ploy was a win for the company. It was covered by media outlets nationwide.
“There are two things you want to get” from this kind of stunt, Kahn said. “The first thing is to build [positive brand] awareness. Payless has been in the news for very bad reasons recently — a lot of stores are closing down; it’s facing bankruptcy. It’s all been negative press. This is really turning the press around.”
The stunt also emphasized another retail goal of the moment: getting shoppers back into physical stores. Kahn noted that many legacy retailers, including Nordstrom and Nike, are playing around with different formats such as pop-ups and showrooms to entice shoppers away from their keyboards and into stores.
“You never know what’s going to happen when you walk into a store,” Kahn said. “It’s a different type of retail experience, so I think [the stunt] is also drumming up some publicity for the different kinds of fun things you can see happening in the physical space.”
Cesareo agreed, saying the Palessi prank dovetails with the idea of giving customers a seamless, omnichannel experience. “There’s so much more you can do in a physical store when you’re literally interacting with customers, who can then post about it and take [the experience] back to the digital world.”
“This may open [younger consumers’] eyes that Payless is a place to go or at least to try out.” –Barbara Kahn
5. Despite Palessi’s Success, Long-term Change Is Unlikely
While the Payless ploy is being hailed as a marketing success, it’s not clear whether it will lead to real, lasting change in the store’s customer base, Kahn and Cesareo said.
Kahn is doubtful that Payless will pick up customers from the luxury segment. Those shoppers simply aren’t going to start going into Payless for cheap knockoffs. She also pointed out that regular Payless stores are still cluttered with merchandise and are generally unappealing, unlike the sleek and stylish fake store.
However, it’s possible that the stunt will help Payless gain some younger customers who may not have shopped there before but are looking for fashion-forward designs at a low price. “This may open their eyes that Payless is a place to go or at least to try out,” Kahn said.
Cesareo thinks Payless will get a lot of “bang for their buck” from the online videos of the stunt, but she said it’s hard to know whether the effect will translate into long-term gain.
“If you can correctly convey that they are very trendy and they do follow the latest fashion trends, some consumers will buy, like I did,” she said. “I consistently go back to see what have they copied from the runway that I can buy for $20 and wear for one or two occasions. Payless has been doing that, but nobody was really aware of it. With this stunt, they put that front and center.”
