What a wonderful job retailers have done training the public to hang off buying for Christmas. The New Year’s sales are now where it is all at. Many businesses who hang out for that last month of the year to do over half of their annual turnover have managed a ‘not so clever shift’. Instead of having the big month with full margins in December they have pushed purchasing back a month and slashed their profits. So they have maintained sales but they have done so at the expense of profits and don’t we consumers appreciate it.
They thought they would have their cake and eat it; a big Christmas and a big start to the New Year.
Well it doesn’t quite work like that. The public has said you can have one or the other, but since you insist we will take the cheap option
Retailers have blown their bolt.
This ploy has been their response to an over subscribed market place and an obsession with ‘sales’ as the ‘no brainer’s’ marketing plan.
So that just leaves another eleven months and the question “what will retailers do now?”
Good question. I’d say they have a monumental problem. Eleven months of sales sounds like Chinese water torture.
Watch for the closing down sales this year folks because there will be many retailers who just won’t make it through to January of next year.
So who will the survivors be?
Those retailers who add value rather than dropping their prices; the retailer who becomes a brand builder.
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2 comments:
Have no sympathy for the retailer who stakes all on lowest or discounted price and places no premium on service and value.
The concept of the "sale" has become so devalued by over and inappropriate use that the buying public in general no longer believe that they are being offered a real deal when the word "sale" is invoked.
Retailer panic has seen far too many become price takers rather than price setters. Prices can always be dropped, but then it is so hard to lift them again without meeting strong resistance and a sense of consumer outrage.
With the exception of certain essential products (fuel, power, water)all other retail offerings are to a degree optional purchases. Whilst also ultimately essential the nature of food, clothing and housing purchase decisions give of a wider variety of choice in this country than the three true essentials noted above.
The company or individual who has spent time, effort and often significant dollars on ethical brand establishment, development and nuturing is more often than not the one which will survive times of ecomomic trouble.
Venal brands deserve to fail. Be they finance companies, trading bank supported investment vehicles or property developers the ones that fail have at least two things in common,amoral principals (and principles) and gullible customers united in a soup of poor (sometimes criminal) advice conjoined with sheer greed.
Although I have no hard evidence to support my theory I believe that ultimately ethical brands, well tended and staffed, with quality product to present not only will survive but deserve to.
New Zealand consumers (indeed most OECD buyers) are vastly over-supplied with product and choice.This is not the sign of a free world and freedom of choice but one of avarice and dilettantism. The spiritual emptiness of this excess is evident in the constant striving for more and lack of satisfaction with what is sufficient.
We are finding out yet again that greed is NOT good, and the worst is yet to come.
Unfortunately high quality branding can also ensure that low quality product too can survive. The fast food chain experience is evidence of that although thankfully some of them are now crashing and burning as the consumer votes with his wallet.
It is a sad indictment of the gullibility of so many of us that the "consumer" is often wrong. Marketers know this and pit all the advertising and marketing sophistication that money can buy against the dumb "consumer" to give continual life to the concept "Never give a sucker an even break". Because that's what so many of us are out there in status symbol land, suckers!
Why else would we think it was a good idea to buy financial product on the say-so of a former TV newsreader? But enough of this; back to good branding and the benefits to those who do it and for those others who buy product from them.
Identify three "crash and burn" (or about to) brands and state your reasons.
Then identify three "winning" (and likely to continue) brands and also state your reasons. Let this be the start of amovement to purge the wasteful and venal operators from our sight and laud and uplift those who are truly deserving.
I am not a number. I am a free man!
I don't know if I agree withy your assessment on NZ retail.
On the whole, there are a number of savvy retailers operating in this market place that have cultivated and enjoy considerable loyalty with their customers.
There are many more large box retailers who have not invested any time or money in developing relationships with customers. Instead they have relied on a sophisticated media buying and price cutting to motivate consumers.
While I think many in the PR and Advertising world wish it was more about the brand, actually it is more about the product/price.
The only time investment in brand really pays off, is when the product(s) itself are of some esteemed value to the consumer. Otherwise the price-hunter behaviour will win out every time.
Taking on the challenge to identify 3 retailers that will be hard hit, I suggest a simple formula - any retailer spending more than 3m in media.
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