Retailing icons like J.C.Penney and Macy's attempted to move away from a special deals/sales model to a fixed everyday low price model and both failed. Where
do markets fit in with the whole retail strategy debate?
Macy's
acquired the May department stores back in 2006 and attempted to dismantle
their coupon based weekly sales system so as to "retrain" their
customers. By 2007 they had abandoned the "retraining" and gone back
to a modified sales price enticement model. J.C.Penney recruited high profile
Apple retail whiz, Ron Johnson, in 2011 who set about changing their weekly
sales and coupon model to a fixed price model. But his departure this month
after a disastrous 25% drop in 2012 sales has seen a complete re-evaluation of
strategies by J.C.Penney.
And if
you think the experience of those two retailers makes the picture any clearer
consider the successful fixed price/ everyday low price model of our own K-mart
and the US giant Walmart. K- Mart has made a roaring success of super low
prices on key items and the expectation is that customers can enjoy those
prices everyday without having to wait for a special sale. Walmart has a
similar philosophy. Just to muddy the waters a little bit further, Walmart have
found that in markets like China and Brazil their customers respond to the
old-fashioned model of across the board higher prices with super discounts on a
select range of goods. So it is obviously a case of "horses for
courses".
Of
course, attracting customers isn't just about low prices. Unique and new
products, a wide choice, and a shopping adventure of discovery are just some of
the key ingredients of a popular shopping destination.
A key
marketing tool for the top end of the Queen Victoria Market is the Shop The
Sheds campaign. Shop The Sheds relies on traders offering a minimum 20%
discount on an item or range of items. That was bolstered by a coupon system on
Facebook although Facebook now charge for the coupons so QVM have dropped the
option. Promotion of Shop The Sheds is through Facebook, other social media
like Foursquare, the Marketlife magazine with its 100,000 local distribution,
and internal leaflets.
Shop The
Sheds is not getting great results and the question needs to be asked - Is a
pure discount model the correct way of promoting the top end of QVM? Should we
adopt an everyday low price model or should we avoid price reference all
together? Traders Representatives and QVM management are currently considering
how the campaign might be tweaked to get results. One option we are considering
is identifying key products in the market that stand alone as desirable,
unique, and competitive without having to adopt a "bargain basement"
discount approach. One of the unique things about our market is that it is full of specialty retailers and specialising often leads to innovation and new and exciting products.
As always we rely on traders to feed ideas to
us and we welcome your input. If you have a product(s) that meet the
"desirable, unique, and competitive" criteria please contact us.
Click on the Have Your Say link below, talk to your Trader Representative, or
email us.