Who Doesn’t Love Sales?

Labor Day weekend is partly about enjoying the last few days of summer before the weather grows chillier. Now that I live in Washington, I’m learning to let go of warm beaches and gain new appreciation for rugged mountain trails, so I hiked Little Si.

Atop Little Si.

But Labor Day weekend is also about something less outdoorsy: sales. Last week, I filled my online shopping cart with everything I wanted from one of my favorite stores, American Eagle, and patiently waited for the weekend to roll around and the sale to arrive. Sure enough, on Friday everything went on sale for 30% off and shipping was free until Monday, so I gleefully made my purchase.

I rarely buy clothes unless they are on sale, and apparently this mindset is so popular that it’s hurting retailers’ profits. Retailers used discounts and coupons to retain customers at the start of the recession, and now they can’t seem to wean customers off the sales. The best example in the article is JCPenney, a retailer that is losing profits as it switched from a very sales-driven business model to and everyday low pricing model similar to Wal-Mart.

This week, my multicultural marketing course is focusing on product, place, price, and promotion. Pricing and promotion may not be first on the list, but we need to remember that a brand is more than just the product and the imagery related to it. It is also the price point and the promotions. Customers do not just become loyal to the product, they also become loyal to its price and the promotions. For example, I love my Kindle Fire, and when Amazon launches a new generation of Kindles I will expect them to be similarly priced to their current Kindle line, which ranges from $79 – $200. If all of a sudden the new Kindles range from $250 – $400, I would be very disappointed even if the newer generation had much better capabilities because I have come to expect a much lower price point from Amazon. On the other hand, iPad users wouldn’t bat an eyelash at a $400 device because it’s what they’ve come to expect from Apple.

I love a good sale, but I have to admit that from a business standpoint it is only a short-term lure. As marketers, we need to remember that price and promotion will become a deeply-rooted part of the brand, so price and promotion need to be sustainable.

How do you think retailers should wean customers off sales?

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One Response to Who Doesn’t Love Sales?

  1. Pingback: What’s in a Price Tag? | Sully Moreno

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