Major retailers everywhere realize the party’s over. The party of high margins and fat sales.
Retailers, scratching their heads at how to attract shoppers, have thrown the retail playbook out the window. Gifts, discounts, “best sale of the season” every weekend – none of these are increasing traffic and sales to the level that retailers need to.
So, they’re going backward in pricing, rolling out lines of merchandise that come in at a lower price point, everyday. Many retailers, from Coach to Abercrombie & Fitch have lines in the works that might attract more customers simply because they’re less expensive. You have to admit, it’s a great marketing come-on, and a great way to get customers back in the store.
THE REAL WORLD RETAILING TAKEAWAY
If everyone else is doing it, should I be doing it too?
In this case, perhaps. How’s that for non-committal?
The key here is to compare your merchandise mix with the mixes that the big retailers are offering. Are Coach and Abercrombie the only ones offering new, lower priced lines? Or is this part of a trend we’re going to see, where new lines at lower prices prevail amongst all major retailers? My hunch is that the latter will be true. So you’re going to have to compete or risk losing sales.
But competing on price isn’t so easy for a small retailer simply because lower prices means lower margins and that means one thing: You have to sell more to make the same profits you did before.
So how do you win? Play a different game. While price will always be a factor, there’s still a significant audience that wants an experience, they want customer service, they want a knowledgeable sales person. That’s how you win. And it’s how you differentiate yourself. It’s your ability to work with your team to provide something that most major retailers have a tough time competing with – a customer experience that reflects you, your passion, and your store concept. Perfect that, and you’ll have customers for life.
How are you going to beat the big boys at the price game?