Between Groupon, Foursquare and all the other internet deal, discount and coupon options, the case for lowering prices is compelling.
But it can also be the worst mistake you ever make as a retailer!
We now know that with certain retailers, if you wait, there will either be a sale or a markdown soon enough. So, unless you need the item immediately, you wait. They have trained you that you should rarely have to pay full price.
Now, think again… Are these coupon/discount retailers those in which you find great value? In other words, are you shopping there just with a coupon, or all the time? Are you still getting personalized service?
So, if you have products and services of consistent value to your customers, why would you discount for new customers who are only seeking the savings and not the value? Soon you would have to cut your overhead which would weaken your customer service and the downward cycle begins.
Merchandising and Customer Service is key
I once knew a retailer on Miracle Mile down in Coral Gables, Florida. She and her staff were fabulous and her customers knew they would always get the best, most personal service and the most unique goods. She was a real legend in retail.
On one of my Monday visits to observe and learn from her, I saw her moving tabled merchandise front and center of the store. I said, “New merchandise?” She shook her head emphatically, “No! No one’s buying it so I’m merchandising it better and raising the price.” She showcased the features and benefits better on the table and together with the staff’s customer service training, the value was increased.
It was all gone by the weekend.
- #1 Rule for Retail Success (http://bizcommunicator.wordpress.com/2011/02/13/1-rule-for-retail-success/)