The post Christmas sales are in full swing…
…so this great Tom Fishburne cartoon is timely…
Read the original post at…
“on the 12th day of Christmas retailers gave to me”.
Sales can be a great way to boost sales and profits in the short term…
…but they carry great risks to long-term profitability if not used wisely.
For example, in the UK there are always sales on kitchens, bathrooms and home furnishings. In fact, it seems it’s become something of a Christmas tradition to head off to the sales after Christmas Day.
Given that, if you’re looking to buy a kitchen (for example) why would you buy at any other time of the year? If you know there is going to be a regular sale, why would you pay full price?
OK, in a tough retail environment you may have to discount to keep pace with competitors.
But if you’re in that situation, that indicates a broader strategic marketing failure. If you’re not unique enough that in effect you’re “in a category of one” then you’re always exposed to the risk of price competition.
So think carefully before indulging in savage price discounting. At a minimum have a good reason and make the promotion limited in some way (by time or volume). Even better, maintain prices but add extra value with bonuses.