Let's Make A Deal: Disturbing Sales Trend in Retail

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When I grew up in the sixties, the holidays were magical and captured in the 1963 hit, "It's the Most Wonderful Time of the Year."

That sense of wonder was immortalized in the classic holiday movie, A Christmas Story as Ralphie and his brother window shop at Higbee's department store in Cleveland, Ohio.

Where was the "big deal" then? Where was the rush to discount? Weren't people struggling in the early '60s?

According to www.recession.org, "The Early 1960s recession was yet another chapter in the modern economic cycle that has shown its ugly side so many times to the U.S. This recession was characterized by, once again, astronomically high unemployment rates, incredibly high inflation, and a bad Gross National Product rating."

Yet wonder still lived at Christmas. Childhood fantasies were embraced. It was about finding the perfect gift.

Contrast that to news that Black Friday, while not a washout, wasn't that great according to Bloomberg.com. What was the news? People were out shopping for "deals."

The National Retail Federations' President and CEO reinforced the perception that all anyone wants is a deal in her press release yesterday, “Shoppers proved this weekend that they were willing to open their wallets for a bargain, heading out to take advantage of great deals on less expensive items like toys, small appliances, and winter clothes.”

That's what retail is devolving down to the "deal," "the bargain," and "the door-buster." What magic is there to sell that? What experience for the gift-giver?

And more importantly, where is the profit for the retailer?

Yes, the big boxes can discount items like 100 toys for $10 but is that a discount? Haven't they deflated the price to the customer? If the game that should retail for $24 because it cost $12 now is perceived as a $10 item, isn't the real cost now $10? If you're like Wal-Mart you can buy the stuff by the containerful and make something on it but what has it done to the value of the product? It has deflated the price; perhaps permanently.

If you are a retailer carrying anything that can be reduced to below your cost I suggest you inform your suppliers you'll no longer carry it. It won't hurt them right now but as the bigger mass merchants continue to play hardball with them, eventually they too won't be able to make a profit. Then what will they do?

I don't want to live in a world where the hotel rooms I have to choose from are dictated by hotels.com, or a flight that makes me have two stops because air carriers can only fill up the planes with cheap deals from Priceline and dropped the direct routes or the cashmere sweater is coarse because the finer stuff won't be a "deal" on overstock.com. In short that everything devolves into a commodity.

I purchased holiday lights the other day from a mass merchant. A couple of bulbs were broken when I got home and as I went to remove them found they were about 1/2 as thick as they used to be, they were like spun sugar.

Have the holidays become, "We saved 60% and got free shipping"- not "Grandma I looked everywhere to find the right scarf to match your favorite outfit. Is America trying to show how "smart" they are and being duped? I wonder...

If the only story anyone can tell is how much they saved, regardless of whether it is a good product or will do the job they want, or be a great gift - shame on the retailers that continue to stoke the easy fires the media are fanning.Access My FREE 5-Part Retail Sales Training Course