Category Archives for "Retail"

Tips for Retailers – How to Increase Your Sales the Week After Christmas

By Randall Orser | Employees , holiday season , Marketing , marketing strategy , Retail , Small Business

The week between Christmas and New Year can be a great opportunity to increase the profitability of your business.  If you do it right, you can net more from this week than any other week in the year.  Here are some tips to help you to have a profitable week.

Creating a Customer Experience – More than likely you will have customers in your store to spend those gift cards that they got for Christmas.  Many will be regulars but many of them will be visiting your store for the first time and you need to WOW them so that they will come back.  Think of little extras that you can offer to enhance their experience.  

Christmas is over, so freshen up your store.  Take down Christmas decorations and promotional signage and change the music.  For those customers who came in before Christmas a change of atmosphere may energize them to buy.

Sales and Incentives – Have your markdowns ready for the 26th of December.  The faster that you move this merchandise the sooner you can freshen up your store.  Some retailers believe in having a January sale instead, but this means that you will not be ordering new stock until February and your store will not have a new look until March.  Stuff bags with coupons to give customers incentives to return.

Full Price Merchandising -  Part of freshening up the store is putting new full priced merchandise out on the floor.  As many people are using gift cards, they might be more likely to buy new full priced items rather than those left over from the holiday season, giving you a greater profit margin.

Reduce your spending on Advertising – As it is after Christmas everyone is having sales. So instead of spending money on advertising use that money to motivate your staff to give exceptional customer service or use it on incentives for your customers.

Refocusing Staff -  The focus has changed from selling stuff, to keeping it sold.  Instead of having staff just concentrate on returns encourage them to focus on converting returns into exchanges and new sales.  Train them on suggestive selling techniques to use when they are processing a return. If you sell a lot of gift cards before Christmas ready your staff to sell prospective new customers.  This is also a good time to update your customer data base and to encourage customers to join your loyalty program.

Show Appreciation to Your Staff – They have just gone through the most hectic four weeks of the year and you are now asking them to do more.  This is a good time to show them that you care, coffee runs, catered lunches or even the services of a masseuse are ways to show your appreciation for their efforts. 

Remember most customers are just coasting until New Year and they don’t expect to find much in stores except sales on leftover Christmas items.  If you have made your target it can be tempting to sit back as well, but this is a great opportunity to create a good impression with customers by giving them new and interesting things to buy. 

How Stores Get You to Spend More Money During the Holiday Season

By Randall Orser | holiday season , Personal Finances , Retail

The Christmas Holidays are the most expensive time of the year for most of us.  After buying gifts for family, friends, clients, Secret Santa exchanges and others, we are left with huge credit card bills or empty bank accounts.  Although this is the season of buying retailers make it even harder on our wallets by employing a number of tricks and techniques to get us to part with even more of our money.

 1.   Deceptive Pricing and Clearance Pricing - Our minds are focused on saving money so if we see an item priced at $19.99 but reads was $39.99, it seems like a great deal and we are more likely to buy it because our brains are wired to feel that we are getting something for nothing.   An identical item priced at $19.99 will not sell as well because it is not seen as a deal.  In 2016 some American stores were sued over the deceptive practice of marking up the price of merchandise just to mark it down again so don’t always believe what you see, there is a good chance that the item is $19.99 all year.

2.   Designing the Store Layout to Maximize Profit - Retailers spend a lot of money researching and planning the best layouts for their stores to encourage you to put the most profitable items in your shopping cart.  Items placed at eye level are most likely to earn the most profit margin for the store as opposed to those on the bottom shelf.

As most people are right-handed and will reach for an item with their right hand so stores will put eye catching displays to the right of the entrance to their store.  These will either be high margin items or items that they want to move quickly.  A good shopping strategy is to veer left when you go into a store and check out the top and bottom shelves where you might find better deals.

3.   Ending Almost Every Price with a 9 - This is a psychological trick that most of us fall for.  $199.99 is a lot more attractive price than $200 even though there is only a cent difference.  People focus on the first digit in the price, 1 being less than 2.  Once the price jumps to $200 it is seen as being between $200 and $300 even though again it is only a cent difference.  We need to train ourselves to see $199.99 as over $200 as that is what it will be once taxes are added.  

4.   Helping Customers get into the Mood to Spend - You may already have Christmas overload with all the smells, sights and sounds that get you into the festive spirit.  Retailers want to make sure that you stay in the mood to give gifts and set up their stores with bright red and green, cheerful colours and lights, holiday music and even offer mulled wine.   When restaurants are busy, they want you to leave quickly, so one trick is to switch up the festive music for something more aggressive and increase the volume.  Tip – ignore the sensory overload, make a list and keep to it, get in and get out!

5.   Specially Packaged Gift Sets and Bundles can Cost More - Stores love to put together gift packs and sets which makes it easier for shoppers.  Beware! you are not always getting the best value for your money.  The cost of these bundles can be greater than buying the items individually, so make sure you are getting a deal before buying a gift set.

6.   Placing Lower-Priced items Next to Expensive Items – this will get you to compare items that appear similar but are different.  By putting a less expensive item next to an expensive one it looks like a steal, but the store could actually be charging more than their competitors.

7.   Offering Double-up Deals that You Don’t Need but Find Hard to Resist – “Buy One Get One Free” is something that is difficult to resist but sometimes taking that deal is false economy.  You may think that you are getting something for nothing, but you need to be aware of the price of the item in other stores.  You may not have to take the deal to get a good price on the item that you originally wanted.

8.   Providing Easy Credit Options -  Retailers know that customers cannot always pay for big ticket items so they offer you credit so that you can spread the payment over time without interest, but you can be sure that their profit margin is built into this.  Customers need to be sure that they are able to pay within the interest free period because the debt will eventually become due and all the interest accrued will be added.

9.   Making Clearance Items Harder to Find – Most stores have an aisle or “end cap” for their sale and clearance items.  In December these clearance items become harder to find meaning that customers have to search for them.  Retailers know that in the frantic rush to get gifts most people will be willing to pay full price.

10.  Offering Customer Incentives – Many stores offer free gifts with purchase you will see many of these at the cosmetic counter.  If you spend a certain amount of money you will get a free gift which encourages those who would not normally buy to put their money down.  Other incentives include coupons and discounts.

Despite using these techniques to encourage you to part ways with your money, stores are not trying to be dishonest.   They are just trying to get you to spend more, thereby increasing sales and keeping their staff employed.   Just be aware of these tricks and you will be able to do your holiday shopping without spending too much.

Cyber Monday or Green Monday – Will you be Shopping On-line?

By Randall Orser | Budget , holiday season , marketing strategy , Personal Finances , Retail

Most of us have heard about Cyber Monday, the first Monday after American Thanksgiving when retailers offer many deals for us to buy on-line, but what is Green Monday?  

Green Monday falls on the second Monday in December, the name is thought to originate from the green colour of the American dollar.  The term was originally coined by Ebay in 2007 to describe the best sales day on their website in December.  Green Monday marks the 10-day shipping period before Christmas and is so successful because people realize that their time is running out to buy and ship gifts to arrive for Christmas.

As other retailers also adopted this day to offer their own seasonal deals (some call it Cyber Monday 2) Green Monday became the third largest shopping day of the season with sales in the U.S. of over $1.6 billion in 2016.  The retailers that usually participate in Green Monday are Walmart, Amazon and Best Buy and though popular in the U.S. the day is not as important on the calendar of Canadian shoppers, but it will probably grow in popularity in the future. 

The first Monday after American Thanksgiving was named Cyber Monday by Shop.org in 2005, although at that time as not many people had high speed internet connections they did not participate.  However, as connections speeds have increased so has the spending on Cyber Monday.  It was the biggest shopping day of the year both in 2017 and 2018 surpassing Black Friday.  Nearly a third of shoppers in the U.S. begin on the day before Cyber Monday and top stores such as Amazon and Walmart start cyber week sales on Thanksgiving Day.

Why Cyber Monday is so Popular

  • According to Adobe Digital Insights 40% of shoppers like the 24-hour shopping convenience.
  • The same number of shoppers wanted to avoid the Black Friday crowds.
  • 30% of shoppers enjoyed the ability to easily compare prices on-line.
  • Almost 90% of retailers offer Cyber Monday sales with 45% offering coupons or a percentage discount.
  • Over a third of retailers offered free shipping and 36% of shoppers said they would increase their on-line shopping if shipping was free.

A few on-line shoppers surveyed said that they would not buy on-line due to expensive shipping charges, or they didn’t like that they could not see or handle their purchase, or thirdly did not like to wait for their items to be delivered.

Mobile Technology and Social Media

Over a third of shoppers said that they would go to social media to get information about Cyber Monday deals usually on a company’s Facebook page and two thirds check out reviews on the company website before making a purchase.   More than half of on-line retailers make sure that they promote their sales on social media and that their websites are optimized for mobile devices.  

Impact on Brick and Mortar Stores

On-line retailing is growing by almost 10% annually and in 2020 is expected to reach $523 billion(USD).  In 2017 over 60% of people in 16 countries said that their everyday transactions were on-line rather than in-store.    This growth in on-line sales is having an impact on brick and mortar stores with more and more declaring bankruptcy every year.  It has been predicted that 75% of shopping malls will close in the U.S. in the next five years and those that do survive will cater only to high income consumers.  We can see from the number of closed stores in our malls that the same pattern is being repeated in Canada.

Black Friday Shopping – Retailers “Dirty Secrets”

By Randall Orser | holiday season , Marketing , marketing strategy , Retail

Black Friday is upon us once again, and we have been bombarded with ads on tv and social media for the last few weeks.  Black Friday started in 1932 in the U.S. when it was considered the start of the Christmas Shopping season.  The name Black Friday originated from the most popular idea that businesses ran at a loss or “in the red” from January to November, but on the day after American Thanksgiving they would return to “operating in the black”. 

Nowadays people shop in person (if they are crazy), or online if they want to buy in the comfort of home.  Though Cyber Monday has now eclipsed Black Friday, it is still a huge shopping day when millions of consumers hunt for bargains and retailers find new and ingenious ways to get them to part with their money.  Here are some of the traps that shoppers can fall into if they are not careful:

Doorbuster Deals” are Scarce – although ads are not allowed to be totally misleading, or tell you something that is untrue, it can tell you something without focusing on the details.  For instance, that ad announcing 60% off a TV will also have small print to tell you that quantities are limited especially if it is a doorbuster deal, so even if you camp out all night you shouldn’t count on getting one.  Although these deals are known as “loss leaders” and stores certainly lose money on them, they recoup it and much more when people hoping to get the deal stay in the store and spend more money.  

Deals Often Require you to do Extra Work – When you see a heavily discounted product you may also see (after mail in rebate).  That means that you will pay the full price on the day and you will have to wait to get your money back, which could take some time.  Meanwhile stores are hoping that with the Christmas rush and activities you forget to claim it which is true for millions of people.

Price Matching Disappears Black Friday week – Most of the year retailers are happy to price match as it makes sense for them to make a smaller profit rather than none at all.  However, some retailers will have purchased extra stock of items at a cheaper price so they can offer doorbuster deals, heavy discounted promotions or be ready to take a loss to lure in customers.  Their competitors will not honour these discounted prices as it may mean that they will lose too much money.

Before and After Prices can be Sketchy – Consumers are easily persuaded to buy an item when they see “Was $100 now $60, and similar offers.  Be aware that retailers can offer an item at $99.99 and then on Black Friday “50% off now $99.99,”  same item, same price but the perception that the price is heavily discounted is more likely to create a sale.  Stores are able to get around the legality of this by being able to use a base price to discount from even if the item has only been at that base price for only one day out of the year.  They can also use a “suggested retail price” as their base price even it is ridiculously high.   Some stores actually charge more for an item on Black Friday than they do for the rest of the year when the item is on sale, hoping that consumers will buy into the signage and the shopping frenzy. You can also see “Before” pricing that was the price when the item first came into the store, when in reality it has been selling for 50% off for many months, so any “deal” that you are getting on Black Friday may only be a small amount off the previous regular price not actually 50% off that price. 

Watch out for Time Sensitive Deals – When checking out those ads make sure to read the small print to see if there is a time period when the item will be at that price.  The idea behind the time limit is to create a false sense of urgency and a shopping frenzy.  You can expect the price to go up significantly when the sale time is over.  You might see an item at $10 at 8am, it goes up to $20 at 10am and is $30 by noon so it is not a good idea to shop around in this case. 

Many Black Friday Deals are Discontinued, Obsolete or Poor Sellers – Black Friday is a wonderful opportunity for retailers to get rid of dead stock, so beware if that something seems to be a good deal, make sure that you are still able to get refills etc. for it and that it is not obsolete.  You might also see products that are a poorer stripped-down cousin to the one that you actually want.    Rule of thumb is always if it seems too good to be true then it usually is.

Retailers Want you to Shop In-store not On-line -  They create a Black Friday shopping frenzy on purpose to attract you into their brick and mortar stores so that you will spend more than you planned to.   However, shopping on-line is making the rush to stores obsolete, you can find the same Black Friday deals the same day or even the week before.

So, make sure that you aware of all the “tricks of the trade” before you rush out to get that deal on Black Friday.   It is really just a day of bargain shopping, some prices will be good, but some items will be available at the same price or better on other days.  If you don’t need to have the item straightaway, consider avoiding the rush and buying on-line.

From an article by Paul Suggett

When Should the Holiday Shopping Season Start?

By Randall Orser | Budget , Employees , holiday season , marketing strategy , Retail , Small Business

There is no specific date when retailers should start their Christmas Holiday selling season, but customers would argue that it starts earlier every year.  Following consumer push back the Christmas retail season usually starts after Remembrance Day here in Canada, that’s unless you shop at Costco!  

Retailers who start their Christmas selling program too early, both in-store and on-line often find that customers are irritated by being bombarded with Christmas advertising, merchandise and songs in November and they are turned off of holiday shopping.  Hiring staff too early can be costly for a retailer, if there are not enough sales to support the extra staff and putting out Christmas inventory too early can be a waste of valuable retail space if it is not selling. 

When it comes to Holiday Season discounts and sales which are appearing earlier and earlier each year it is important to put a lot of thought into the products or services that you want to discount.  It really depends upon your business and your market, but these considerations apply to most retailers.

  • If the items are appropriate for the time of year, you don’t want to be selling summer season items in winter.
  • If the items are appropriate for your location – there is no point in trying to sell mitts and scarves in somewhere like Florida or Southern California, they need to be sold in colder climates.
  • Timing – whether your customers will have money to buy early in the season or they are most likely to spend when they get their Christmas bonuses.  You could consider a layaway plan for larger ticket items so they can be paid for over a number of weeks.
  • What you want to have in stock for after Christmas sales when people have more time to shop and likely have more cash and gift cards to spend.
  • Following what other retailers in your industry do if it is a good decision for your business.  It is always a good idea to know what your competition is doing but don’t start your holiday sales earlier because they do if it does not make business sense for you.

Starting your Holiday discounting too early although beneficial to some customers to others it is confusing.  Two months of constant big sales makes it difficult for them to know when to buy to get the best deal, it can also sap any sense of urgency and deter them from making major purchases on Black Friday and Cyber Monday.