Friday, November 25, 2011

The value of "Sales."

So it turns out that when you really examine "Sales" they turn out to be as much a negative as a positive.

They turn out not to generate return business, or customer loyalty. In fact, they hurt future sales because the customer is likely to feel like they've done their shopping already.

At the same time, they also hurt margins.

They devalue product.

They make the customer cynical about real 'value.'

But. This being America. Stores do it anyway.

Cause, you know, that's the way it's done....

P.S. This not the same discussion as having real 'value'.

Or even getting a deal. I can often give a customer a deal on an item, when I know what I paid. There is something to be said for striving for a regularly "fair" price, instead of cut throat pricing (and that goes for both higher and lower prices.) In other words, I won't either overcharge you or undercharge you.

I read a book in 1987, called the Big Store, which as about Sear's resurgence. (Obviously -- it didn't take.)

Anyway, I remember the part where the new C.E.O. decided to pull out all the stops in having a bang up Christmas. So they priced everything they could competitive with other stores, tried to beat other stores in other pricing. All predicated on the idea that overall sales would make up the difference.

So the management got all excited by the news that they were having record sales all Christmas.

Until they added it all up. All the "Sale" stuff had sold, but most of the regular stuff hadn't. (Or, more accurately, the sales of the regular prices material hadn't made up the difference.)

They'd lost money. They'd emptied their stores. They had, in effect, "Given Away the Store."

I always remembered the phrase, "giving away the store," because it's easy to do. I see it all the time, in fact, often when another store seems to be selling more than seems possible, it's probably because they are being imprudent.

Even after reading this book, I didn't quite get it. I probably sold millions of dollars worth of sports cards over a 18 year period -- and had nothing to show for it. I call it, "Churning the cash."

I want "everyday regular prices" -- to paraphrase Walmart.

I recently had a woman return a book. The crime? I had charged the regular price of the book.

Oh, well.


Duncan McGeary said...

So the logical question is: If you can afford to charge such low prices for a sale, why aren't you doing it all the time?

And if you can't afford to do it, why are you doing it?

In a sense, that is the question that Walmart and every other discount store poses; Thus, "Everyday low prices."

But that simply begs the question, if you have already the lowest prices possible, then how can you have a sale?

And so on.

The answer is -- it's manipulated. It either never was a real price (thus the eternal 50% off furniture stores) or it was built into the process.

So are you really getting a sale? Or, as is often the case, have they removed a value?

H. Bruce Miller said...

"I recently had a woman return a book. The crime? I had charged the regular price of the book."

Should have refused to take it back. Who needs customers like that?