Retailers’ Holiday Strategy Doesn’t Have To Be “Discount Everything”

In what appears to be an increasingly healthy U.S. economy (4.9% unemployment rate, applications for unemployment at a 43-year low, median income on the rise), why are retailers choosing to battle it out on price? While customers used to count on Black Friday for the lowest prices of the season, in recent years retailers have been advertising ”best deal” sales regularly throughout November and December. As a result, customers have been conditioned to expect discounts. In addition to satisfying consumers’ discount desires, retailers have their own agenda to further lower prices. The tug-of-war continues between brick-and-mortar stores and online shopping, and both sides are slashing prices to sway customers (indeed, it seems that online sales may have won the Black Friday–Cyber Monday battle this year). And finally, with customers allocating more money for holiday purchases, retailers are cutting prices in the hopes that people will spend more. Retailers should know that there are alternatives to engaging in price-to-price combat. Here are four margin-preserving price strategies that can be used to entice consumers to purchase now. Read more at Harvard Business Review.