It’s hard to imagine why big national retailers continue to play the fools game, thinking that by discounting their prices 40-50% or more they’ll increase their profit.
Perhaps they think they’ll make it up on volume.
When you cut prices, the first thing that you give up is a piece (or all) of your profit.
Retailers who spent the weekend falling all over themselves catering to an upscale clientele don’t have this problem, especially if they’ve cultivated and groomed the relationship with that clientele all year long.
They didn’t have to go to the home of an employee and explain how a young employee was trampled to death, simply by having the misfortune of being the guy who unlocked the front door to his employer’s store.
When price is the only way you have to differentiate yourself from your competition, you deserve any pain you feel on your financial statement at the end of the quarter.
Is that the only competitive edge that you can find? If so, you aren’t looking hard enough.
Is there a Wal-Mart in Pamplona?
Another “competitive edge” – one that contributed directly to last weekend’s trampling death and injuries at a Long Island WalMart – is the special sale that starts at 0-dark-thirty in the morning and offers limited items at the special pricing. 2010 update about stampede.
Our store is better because we can get our people to the store before yours.Â Woooo,Â impressive.
If your competitors’ move their start time to an hour before yours, when does it end? Do you start aÂ Cold War over who can open their doors first? In an ultra-competitive environment, is that really how you want your clientele to choose who their vendor is?
Do you really have to stir up a frenzy over one (or 10, whatever) $299 plasma screen TV to get people into your store? Is that the only edge you have?
Don’t get me wrong. I’ve told you to read Cialdini and will again. We’ve discussed scarcity and will again.Â However, we’ve also discussed common sense.Â Hopefully, we don’t have to discuss making sure your staff and clients leave the store alive.
Is it really worth having 300-400 people stampede over your staff and each other as if their survival depends on it? This isn’t the first time it has happened. Human behavior is not a surprise in these circumstances.
Yeah, sure. You can blame a small percentage of morons for this ridiculous behavior, but it isn’t just the customers in that store who were in the wrong.Â But… big retail, in their typical lazy way – they continue to confuse the customer with the sale as the most valuable part of their business.
All this focus on creating temporary insanity among your prospects for one transaction on one day illustrates the lousy, if not non-existent, relationship that most large US retailers have with the buying public.
That’s where the problems really lie. When you commoditize your marketplace by competing solely on price, you’re one of two things: Wal-Mart or crazy.
Wal-Mart can afford to do these things. Their entire business – and the systems that drive it – is built around that premise. They have the logistics, automation, buying power and mammoth size to make it happen.
If you aren’t Wal-Mart or crazy, you have to do something different and better. I don’t mean to suggest that you can just double your prices, do nothing else and expect all to go right with the world.
Remember, Business is Personal. Build the relationship. Deliver the value. When nothing else matters, they’ll shop on price.
Make other things matter.