How To Attract Retail Customers Without Discounting

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The mistake many independent retailers are making this holiday season is they are trying to keep up with the price cutting frenzy of competitors and discounting their own prices. They feel they can only attract shoppers if it is a “deal.”  Not necessarily true.

I went into a large chain toy store near Boston recently and found stacks of merch under price signs. In one bin were various items under a $9.99 red arrow; another at $19.99, etc.  Shoppers were taking notice; but the thing was, these items were not on sale.

The Wal-Marts of the world and the fast food feeders have taught a certain shopper to only be attracted to a price; like lemmings. Yes lemmings you know, the animals that will follow each other without thinking, off a cliff .

For a certain time constricted shopper, this may be an easier way to browse.  Like this display at Starbucks I saw yesterday.

It may also limit profits as you are giving in to the mission shopper who has come in with a price in mind. Here’s what I mean…

Every aspect of retail has the same issue, customers don’t know how much something costs.

When I was in the western wear business I’d hear comments like this day in and day out, “I’d like to spend about $75 on a pair of boots.”  The average pair they strolled out with were about $150.  A window fashions retailer could hear, “Oh we have a usual window and I’d like to cover it for about $100.” There is no “usual” size window and the ultimate cost can be much more. In the hotel business, “I just need a bed, not the extras – I’m just going to sleep there.” If you want to sleep well, you pay more (see my post on the Four Seasons Houston.) Think about the last time you priced a new car.

Unless you work in the sector of business you’re considering, most prices for everything will carry a lower perceived price. That’s why its up to good displays, great salespeople and great products to help shoppers get what they want, not necessarily the price they say they can afford.

Instead of discounting your merch, try arranging a few items by price this week and see how much interest they get from customers. Then train your staff to combine, add-on and suggest alternatives to make this holiday season a happy one; not result in a miserable New Year when the true cost of your discounting reveals an unprofitable month.

To learn how to grow your business, pre-order a copy of The Retail Doctor’s Guide To Growing Your Business either for yourself or a friend.