Knowing How Much To Charge Is Key To Profit In Any Season

It's December 25, 2013 as I write this -- my annual reprise of Tom Fishburne's The Twelve Days of Christmas.  The countdown to Christmas 2013 is over! Toward the end, when it came to holiday retail pricing and service, some stores had extended hours -- including non-stop shopping -- to accommodate the late rush of shoppers. Other U.S. retailers rewarded last-minute shoppers with last-minute freebies and options and gift cards; still others relied on sales and promotions, others on customer service and shipping/delivery heroics.  

This year the retail promotions for the holidays seem to have been more orderly and subdued, more thought out, less entered in a state of panic. There weren't as many early "wholesale" promotions and discounts that we've seen in recent years.  But did it arrive at the same results?

According to the December 24th news on WGN-TV, Chicago,"it was a disappointing sales season… Down 2.1% last weekend." The reporter suggested that shoppers might now be waiting for the massive post-Christmas sales that retailers are promising… 

The analysts will come up with the real figures shortly.

In the meantime, here's a little goodie we've run the past two years at Christmas: Marketoonist Tom Fishburne's version of what the 12 days of Christmas look like when retailers don't apply themselves to setting and getting the right prices:

 Marketoon with permission of Tom Fishburne

In recent years, retailers would get jumpy and competitive and start offering sales before even trying to get reasonable prices for their merchandise. This Holiday Season, I felt, for the most part, that retailers controlled themselves with more realistic competitive prices.

In a tough retail environment, however, it's understandable that retailers might yield to discounts to keep pace with competitors. But being in that situation can also indicate a broader strategic marketing failure, i.e. if you're not unique enough in some way that makes you a category of one (think Nordstrom, ShoeBuy, eBags, Apple) then you're always exposed to the risk of price competition.

Bottom Line For Your Bottom Line:  

Sales can be a great way to boost sales and profits in the short term -- but sales carry great risks to long-term profitability if not used wisely.

With pricing and assortment intelligence solutions you can see where you stand in relation to your competitors. Retailers can compare assortments with their competitions' to see what you have in common, what you each have that is unique, whether your competitor is out of stock…

That's really the only way retailers can make the key decisions about how to get the best price and leave no money on the table -- which is technically the only way retailers can expect to make a profit -- in any season!

 

Share this post
Gilon Miller, CMO

About Author

Gilon is a seasoned marketing, sales and business development executive with over 15 years of experience in the software and Internet business. He is the Founder and CEO of GuruShots. Previously, Gilon was the CMO of Upstream Commerce, VP of Marketing at iMDsoft and Director of Global Marketing at SAP. He earned an MBA at the MIT Sloan School of Management and a BS in Electrical Engineering from Tufts University.
Follow us

Comments are closed.