Just take a look at the headlines on the Chainstoreage.com home page.
Ann Taylor Posts lower profit
Pacific Sunwear posts wider loss
Barnes & Noble posts loss
While not every retailer is in red, most are. Even with Limited brands, where the headlines states Q1 earnings are up isn’t exactly telling the truth as overall sales fell 17% and same store sales fell 8%. In essence, they saved their way to prosperity. A great solution for the short term, but it doesn’t make up for a 17% decline in sales.
THE REAL WORLD RETAILING TAKEAWAY
It’s tough out there. But you already knew that.
If the big retailers of the world are seeing sales tumble in the double digits, then you need to brace yourself for the same if you’re not experiencing it already.
While this economic downturn is beyond anyone’s control, you have to be realistic about the potential to grow your business in this tough climate. I’m not advocating throwing in the towel, but I am saying that you’ve got to be realistic about your opportunities to achieve growth on top of prior years.
So many people I’ve encountered are frustrated by their inability to move the customer to purchase. Transactions are down, average transactions are down and sales are down.
Value is the name of the game these days, especially as energy and food costs continue to soar. I’m continually amazed by the deals being sent to my home every week. A day spa just sent me a certificate for a $40 bounce back. So get this. I go have a massage and spend $150 including tip. They then validate my bounce back and I come back again and get a $150 massage less the $40 bounce back. Are they crazy?
In this tough economic climate, they’re offering me a 15% discount, but more importantly, they’re asking me to give nearly double out of my pocket than I would have given if I had just had one massage. I guarantee this isn’t going to motivate anyone.
Be smart about the deals you’re offering. Make sure it’s something that people are going to take advantage of. Don’t just put it out there and have it be so self-serving that no one takes advantage of it. Get them in the door — that’s the goal. Once they’re inside, you can upsell to your heart’s content.
Tough times call for smart marketing. How are you getting customers in your door?