A few weeks ago I read a funny headline. It said, "ALL I WANT FOR THE HOLIDAYS IS CUSTOMERS!" I thought about that and chuckled for a minute or two. Clearly the headline was accurate. This holiday season was down, in fact way down from the past few years. Now that the holiday season is past us, it will get a lot worse for retailers before it gets any better.
Attention retailers: These days consumers want a deal. THEY DON’T WANT A GOOD DEAL, THEY WANT A GREAT DEAL!
Frankly, I am no different. I want to buy something on sale. If it’s 25% off, I like it. If it’s 30% off, I like it even more. I believe the average consumer wants a 2 for 1 deal. Or buy 3 get 2 free as I saw in the grocery store yesterday. Lots of retail stores are not only giving you a deep discount but future $$$ off for future visits. Kohl’s had a promotion that for every $50 you spent you got Kohl bucks to spend during a visit that had a two week window.
To me it is simple. If you want customers these days, you had better have great promotions. You need to be giving away stuff. You need to make sure the consumer (me) feels they are getting a good deal.
We had a friend over our house last week who was saying she wanted to buy a few items online but was waiting until the company had free shipping. I don’t think she is alone in her thinking.
Retailers need to get creative with their promotions. I feel strongly that this will happen in the months to come.
When we were growing up, retail stores would often have loss leaders. Well I think lots of stores (if not all) are doing that now.
- Do you agree with what I am saying?
- Are you waiting to buy something until it goes on sale?
- Are you buying more things on sale these days?
- Do you feel bad if you don’t buy something on sale?
I look forward to reading your comments.
Stephenie Gordon says:
Funny enough, we were just having this exact conversation at the front desk. 5 women standing around, and all said they do not shop at the retail anymore. We are all willing to hunt and peck in stores like TJ Maxx and Marshall’s just to get a better deal, or we wait until Bloomingdale’s has a sale…
Paul Kirch says:
As a consumer, I would agree. Who doesn’t want a good deal. However, I still believe companies in our industry trying to use these promotions sends the wrong idea. I remember the blog posting you had last year on that very topic. Though tempting, I think companies quickly lose credibility when they start offering promotional discounts or BOGO (buy one get one) offers. In that blog posting, almost all of the readers agreed that it’s not well received or it cheapens the brand names. Does this make us somewhat hypocritical? Or do we believe these offers are really only for the retail world? What happens to their brand value when they offer these perks?
Merrill Dubrow says:
Paul,
Appreciate the comments. I remember that post. I think the difference for me at least is that post was talking about discounting sample, phone hours etc using a direct mail campaign to promote the service. Frankly I was uncomfortable with that.
I think in order for retailers to really survive (Linen & Things, Circuit City and many others haven’t) they need to put things on sale, have promotions. With the economy the way it is people (including myself) need to know I am getting a better deal.
Interesting that yesterday I got an email from Marriott Hotels highlighting lots of their properties and a $59 rate.
I think this is going to be the trend for awhile.
Just one mans point of view.
Thanks again for your thoughts.
Merrill
Bette Anne Champion says:
I may be a little weird (OK, a lot weird) but when I see a “great deal” in the BOGO range or 50% off, I wonder how the company can sell a product that cheaply. The only thing I can come up with is that all along (prior to the sale)they have been selling that same product at a greater than 50% mark up or else the sale amount is less than they paid for the product. I can see the BOGOs if you are clearing out Christmas decorations for beach umbrellas but on non-seasonal stuff, I just wonder. On the way to work today, I saw a sign on a cleaners that said “SALE ! 50% OFF DRY CLEANING EVERY DAY”. Well if the cost is 50% off every day, that is not a sale at all, that is the regular price! I’ve rambled long enough, I’m heading out to Macy’s One Day Sale that goes on until Monday!
Merrill Dubrow says:
Bette Anne,
I understand what you are saying. I feel the same way when I see an ad or commercial for “money back guarantee”. For some reason I don’t like ads or sales like that – I never have.
Appreciate the contribution.
Merrill
Ed Sugar says:
This is a timely post. This past weekend, my wife and I decided that we would swap home office space. The initial logistics suggested that it would be best for me to get a laptop for this new room I will be working out of. After the past two days of just peeking at what is being offered, I can tell you this is the best time in the history of man to be shopping for a laptop computer. And I have not even begun to get into negotiation mode.
Merrill Dubrow says:
Ed,
I wouldn’t want to be on the other side negotiating with you. At the end the store may owe you money! And of course the product!
Good luck.
Merrill
Seanjjordan says:
Oddly enough, in one of my graduate classes last night, we were talking about how the BEST way to erode brand equity is to start discounting. A lot of the big consumer packaged goods companies, like P&G and Kraft, have worked themselves into huge holes that they’re struggling to get out of because they’ve taught consumers to wait for discounts. The same is true with a lot of retailers. When I managed an EB Games / Gamestop store, we had many customers who would wait for the “Buy 2, Get 1 Free” sale to make their major purchases.
The retail industry used to scoff at the off-price retailers and discounters and accuse them of selling junk in dirty stores that offered lousy service. And yet places like Kohl’s, Marshalls, Gordmans and TJ Maxx have really upped the ante over the last several years, changing their appearance to look more like department stores and less like off-price stores. But as anyone who’s familiar with the “Wheel of Retailing” knows, these off-price stores are likely to replace the traditional retailers down the road… and be challenged by a whole new class of low-priced upstarts.
Incidentally, the smartest thing traditional retailers could do right now would be to get into mergers with the discount stores and use the discount lines as the “outlet” style stores. That way, they’d be reaping the benefits of this trend instead of cursing their competitors.
Dan Prince says:
I grew up in retailing so I think about retailing principles and practices a lot, in terms of running my own research company. We’ve run promotions during previous downturns, and had some success. Currently, our approach is a little different.
We offer a suite of services that we call “On Demand” Research–aimed at DIYers out there who are trying to design a survey and just want some guidance on the questions, or someone who just needs 100 phone interviews done quickly to complement the results from an internally-run online survey project, that sort of thing. We are finding that as company budgets tighten, there is interest in this “ala carte” approach to buying specific research services. It seems to be working!
Merrill Dubrow says:
Dan,
Interesting idea. I am so glad you guys are having some success! Keep up the good work.
Speak to you soon.
Merrill