'Fooled': How Payless duped people into paying $600 for shoes

The shoes were supposedly designed by Bruno Palessi. Photo/Bloomberg.

A mini-runway, lined with stiletto heels, glistens in bright fluorescent lighting. Shoes of various types sit neatly in individual glass shelves. A statue of an angel carrying several shopping bags stands in the middle as Los Angeles fashionistas mill about, trying on shoes, posing on the red carpet, drinking champagne served in tall, slender glasses.

It was a private launch party of a new luxury brand of shoes called Palessi, designed by Italian designer Bruno Palessi.

"I would pay US$400, US$500. People are going to be like, 'Where did you get those? Those are amazing,' " a woman said as she tried on a pair of bright-gold sneakers with leopard prints.

The woman was not actually buying a Palessi because there's no such brand, and there's no Bruno Palessi.

There is, however, Payless ShoeSource - a discount shoe retailer hoping to shake things up through an elaborate - and expensive - advertising prank to attract new customers and change the perception that the company just sells cheap, unfashionable shoes.

"We felt like this campaign would be a great way to get a lot of people to consider Payless again, and to realize it's more than just a shoe store in the mall," said Sarah Couch, Payless's chief marketing officer.

But the prank also points to a reality about the human mind: Consumers are not capable of discerning the quality and value of the things they buy, said Philip Graves, a consumer behaviour consultant from Britain. Slap a fancy-sounding European label on a US$30 shoes, and you have an illusion of status that people will pay an exorbitant amount of money for.

"The way that we evaluate things is through associations. If you put wine in a nice bottle, people like it more. If you package things up to look more premium, people will like it more," Graves said. "If advertising has high production qualities, people will think it's better."

The campaign is the brainchild of a 10-person advertising company in Brooklyn. DCX Growth Accelerator specialises on big media pranks, or what the company calls "culture hacking." A few weeks ago, the company pitched its idea to Payless, which had been looking into an out-of-the-box advertising campaign ahead of the holiday season. DCX examined Payless's early successes, why its momentum had stalled, and what it can do to help turn the brand around, said Doug Cameron, who founded DCX in 2015. Payless shuttered hundreds of stores and laid off thousands of employees last year.

Companies are masterful at creating the perception of value in the way they present their brands. Photo/Getty Images.

"We wanted to do something provocative. We wanted to get Payless back into the cultural discourse," Cameron said.

First, the team needed a location for the fake launch party, and found what they thought was the perfect one: a former Giorgio Armani store at Santa Monica Place, an upscale shopping mall that houses stores such as Louis Vuitton, Barneys, Michael Kors and Tiffany & Co. The team rented the space for six weeks.

Second, they needed a name, and they wanted something that sounded like Payless. Among the first ideas was an upscale, hipster Brooklyn-based boutique they'd call Eli Pass. But the team eventually settled on an Italian theme. They rearranged the letters in Eli Pass and came up with Palessi.

"I think Bruno came later," Cameron said of the fictitious designer's name.

They hired an interior designer to help them create an authentic, luxurious look for the launch party, as well as people who would pose as sales employees. They brought in gold mannequins, hung white paper shopping bags and installed the big-winged angel statue in the middle. To push things a bit further without revealing the joke, Cameron said they wheeled in gold-painted statues of lions and a giraffe.

The team said they kept most of what's already in the store, such as the glass shelves, on which they neatly arranged varieties of stilettos, pumps, sneakers, boots and leather shoes. They covered the original brand labels with stickers that say "PALESSI" in clean, black font, slapping on price tags as high as US$1,800.

The team also created an Instagram account and began crowding it with captionless and random pictures of models and stilettos. They bought and created a website, which is mostly empty except for the images of two stilettos on mannequin hands.

Then, finally, they needed potential consumers. Cameron calls it "real person casting." They scouted the streets and the Internet for social media influencers, fashionable people who look like they're likely to attend this type of event.

"They way we framed it is it's a new store, a new brand and the owner is looking for some feedback," Cameron said.

On the day of the launch, Oct. 27, unsuspecting attendees lined up outside. The DCX and Payless team used the back of the store as a control room of sorts, equipped with monitors attached to video cameras. As people arrived, paid interviewers and cameramen asked them what they thought of the shoes and how much they would pay for them. Cameron and his team were in the back, dictating the questions through microphones.

"Palessi is just such high quality, high fashion, taking your shoe game up to the next level," said one man wearing spiked necklaces, holding a high-heeled, knee-high boot. "It looks really well made."

"It's just stunning. Elegant, sophisticated and versatile," said a woman, as she holds a pair of floral stiletto heels.

"For me to experience this as an Italian designer is amazing," said another man with an accent.

After attendees purchased overpriced shoes ― some for US$200, US$400 and US$600 ― they were taken toward the backroom, where the prank was revealed.

"You've got to be kidding me," said the woman who had gushed about the pair of floral stiletto heels, her eyes wide as she stared down at the overpriced shoes in her hands.

The team said those who bought the shoes were allowed to keep them for free.

Cat Chang, a Los Angeles diamond designer, was among the unsuspecting fashionistas. She said she didn't buy shoes because she had already bought a bunch of pairs a few days earlier. But she would have, had she found a pair her size.

"We wouldn't have ever known. We were really convinced," said Chang, who said she was paid to attend the event. "They had us fooled, like completely."

Chang said the experience made her rethink Payless, and she plans to visit a store soon.

Graves, the consumer behavior consultant from Britain, said the advertising campaign will have some short-term benefits for Payless, but he doesn't think it will hurt established luxury brands.

"Consumers have been paying hugely inflated prices," he said. "Some of the pleasures that we get from things that we buy come from the money we spent on them."

He also doesn't think the elaborate prank, which Payless described as a "multimillion dollar integrated marketing campaign," will have a lasting impact on the retailer's brand.

"The next time someone goes into a Payless store, they'd be going into the ordinary Payless environment, seeing the ordinary Payless pricing," he said - not the chic, glamorous, red-carpeted store in Los Angeles.

Couch, Payless's chief marketing officer, hopes Graves is wrong. She said there's more to Payless than physical stores.

"The shopping experience on payless.com is different from the store . . . It's the fastest-growing piece of the business," she said. "The stores are an incredibly valuable part of the business, but the digital side is the focus of the campaign."

- Washington Post