HOW SHOULD RETAILERS BEST USE PROMOTIONS THIS HOLIDAY SEASON?
Q: I read your advice saying not to promote too heavily this holiday season, but can you give us more guidance on what you recommend?
I see some bigger retailers already starting their Black Friday promotions, and I’m feeling the pressure to start triggering some deeper markdowns. Thanks.
Steve Pruitt: I would continue to hold off on markdowns at this point. Yes, you’re correct that big box merchants have gone from Black Friday to Black November. But, these are not specialty stores, and they are absolutely not designer stores.
When we ask merchants about discounting the answer is always the same: markdowns are not driving traffic. There is one exception, and that is at 70 percent off. But at 70 percent off, you’re not making any money. So be cool, sell what you stand for, which is service and quality.
Most specialty stores don’t plan on taking markdowns until after Christmas. Remember when I was talking about realigning seasons a few months ago? Do it now if you haven’t already!
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Steve, good advise… I’m a wholesaler and willing to help a specialty retailer to offer his customer a special deal. I would like to suggest something he would not normally order, give them a good special price and have him do a normal markup which would be a lot less than taking a big markup making the product no special deal. I’m an ex-retailer and found that new items create a conversation and creates new sales and new customers. Don’t expect me to continue to fill in at that special price. They need to tell their customer “deal is limited to stock on hand”. This works for Costco why not the specialty retailer.