Payless sets up fake luxury store, tricks fashion influencers into paying $640 for $20 shoes

Crowds flocked for the grand opening of Palessi, Santa Monica’s newest luxury shoe store. California’s most powerful fashion influencers were there, brought out by special invitation or just by the growing buzz.

The shoes there weren’t cheap. A pair of pumps, at Palessi, could fetch a price as a high as $640 – but for quality like this, people were willing to pay. Within hours, shoppers had handed over more than $3,000 for what they thought were luxury shoes.

But what they didn’t know was that those $640 shoes weren’t really from some mysterious, luxury designer. They were from Payless ShoeSource – and they normally sold for $19.99.

The Palessi Experiment

Palessi wasn’t a real store. It was a stunt dreamed up by a marketing company called DCX Growth Accelerator to promote Payless ShoeSource.

The company bought out a former Armani Exchange, filled the location with pumps and boots that, at their store, retail from between $19.99 – $39.99, and then slapped them with price tags that ranged from $200 – $640.

Then they invited as many fashion influencers as they could, then followed them around with a camera, asking them how much they’d be willing to pay.

“I would pay $400, $500,” one woman said. “People are going to be, like: ‘Where did you get those? Those are amazing!’”

Others called the shoes “elegant” and “stunning”, while one man boasted that, with his keen eye for workmanship, he could “tell it’s made with high-quality material.”

When they were told the truth, the shoppers were shocked. “You’ve got to be kidding me,” one woman said, her eyes bulging, while another admitted: “Did I just pay too much?”

Every shopper was given a full refund and allowed to keep the shoes they’d picked out. The stunt, however, has worked as a real-life Emperor’s New Clothes, exposing how the value of a product can become inflated by perception.

Payless is also hoping that it’ll lead to a boom in their struggling business. The company was recently forced to shut down 637 stores and file for Chapter 11 bankruptcy. They’re hoping that this marketing stunt will get enough attention to turn things around.

Dave & Dujanovic weigh in

When KSL Newsradio’s Dave & Dujanovic talked about this story, Dave Noriega called it “the greatest marketing campaign of all time.”

If you missed the show live, you can still catch everything they had to save on the Dave & Dujanovic podcast.

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon on KSL Newsradio. Users can find the show on the KSL Newsradio website and app, as well as Apple Podcasts and Google Play.