No More Discounting!

Lately many business owners are telling me they are tired of discounting their wares.  The “sale” ploy has run it’s course and by now I hope most retailers have the right merchandise mix and the right level of inventory of goods that people want to buy without having to cut prices as the primary step to build traffic and cash flow. 

 The risk of sale pricing is that you are subject to commodity pricing rules- the low priced goods prevail.  I’m starting to see a new trend of limiting the quantity of merchandise  (primarily in the soft goods market but equally applicable to specialty retailing) to get full prices for goods that are considered valuable.

 The door busters used to draw holiday shoppers this season had some interesting conditions… one national chain had a limit of 500 items at the low price but spread that limit across the country at all their stores rather than having a per location limit.  With 136 stores only 3-4 items were available per location.  And...  sorry no rainchecks! 

Actually that's good for specialty retailing... consumers will start to migrate to quality having been subjected to such tactics.

What about value?  It’s something customers used to trust you with.  If the product is fairly priced and will met their needs then it has value to them and will help you build repeat business.  However the word “value” has been promoted interchangeably with “sale” nowadays so I caution using that term in promotion.  Improving service, creating events and fun tastings and cooking demos will improve your value more than advertising a sale.

Ron Jakubisin

Jakbisin.com