Has the everyday low price experiment failed?
An article by Ely Portillo in the Charlotte Observer indicates that Lowe’s is the latest retailer to try everyday low prices. This comes on the heels of failed attempts by Sears, Macy’s and more recently, JCPenney’s. It is my opinion that retail executives are taking the path of least resistance by implementing this policy in their stores. Why? They are looking at the bottom line instead of the big picture. They believe that creating and marketing ‘sales’ is expensive, and, ‘sales’ focus customer attention on price, as if that’s a bad thing. What they are forgetting is that promotional sales will:
- Increase traffic with new customers.
- Increase the number of non-sale items purchased.
- Increase the frequency of existing customer visits.
What the Lynch Sales Company does will discipline store owners to make the following decisions or ask the following questions:
- Which items should be put on sale?
- How much should the discount be?
- Will these sale items bring only price buyers of will they attract people who’ll pay more for my bread and butter goods or special orders?
- How will my competitors respond to this sale?
- What media will I use to communicate the sale?
- To whom will I communicate this sale? To existing customers only or to others as well?
The reason why Macy’s, JCPenney’s and, now, Lowe’s everyday low price strategies aren’t working isn’t, as the leaders of all three of these companies suggest, that customers have gotten used to sales, it’s because they’re continuing to focus their customers’ attention on price. But, it is not that simple.
The biggest reason that everyday low price strategies don’t work is that these companies aren’t replacing their sale ads with other marketing messages. Out of sight, out of mind. Or, if they are offering replacement ads, they’re not focusing on what’s important to their customers – image, innovation or time savings. These three intangibles are the only things any business sells.
People love sales! Especially Lynch Sales Events. The huge amounts of footfall that we generate is an opportunity to show the consumer the look and feel of your store, the quality of your merchandise, the friendliness and helpfulness of your sales staff and the visual appeal of your displays. Sales are a time honored tradition that continue to work very well, especially when orchestrated in such a way that no detail is overlooked.
Chris Lynch • October 23, 2012