I’ve never been into gambling, but I had a business trip to Las Vegas a few years ago. My boss and I had a few hours of downtime between our client meeting and the redeye flight back to New York, so I did some sightseeing along the Strip.
After watching the Bellagio fountains, I walked inside the casino. At several of the open tables, I saw people betting — and typically losing. So that I could say I bet something, I put a dollar into a slot machine and promptly lost it. Then I headed to Tiffany & Co in the casino’s adjoining mall, to buy my then-girlfriend a silver bracelet.
In economics and marketing, “substitutes” are something a consumer will buy instead of something else — for instance, a Honda Accord vs. a Toyota Camry, or store-brand detergent instead of Tide. Buying nothing can be a substitute, too.
I doubt the Bellagio marketing department saw that bracelet as a direct “substitute” for blackjack or the slot machines, but I figured it was a better use of $150 than losing it in the casino. And they still got a cut.
When your customers buy from you, what are their marketing substitutes?