Customers Just Aren’t Buying It
By George Anderson
Before Christmas, retailers were wishing that consumers would make a last minute push for Christmas gifts. Their wishes didn’t come true.
Helen Bulwik, a manager with IBM’s U.S. retail-consulting practice told The San Francisco Chronicle, “This is turning out to be just an extraordinarily difficult season.”
Even Wal-Mart has been less than sanguine about it holiday numbers, predicting that same store sales would be at the low end of its forecast of three to five percent.
Retailers approached this holiday season with leaner inventories hoping to avoid the discounting that was needed in 2001 to clear store shelves. Consumers, however, didn’t buy it and stores find themselves in the position of having to cut prices (and margins) if they wish to move merchandise.
Moderator’s Comment: What lessons can retailers learn
from this year to apply in the future?
- There is almost nothing that consumers will not put
off purchasing until tomorrow if they believe there is a better deal to be
had by waiting. As John Salkowsky of Prescott, AZ told The New York Times,
“There are always sales. Why pay retail when you can get it on sale?” - If all stores sell the same brand products, then price
becomes the point of differentiation. Instead of stocking less of the same
product that everyone else is selling, find items that no one else is carrying. - Advertising sales no longer works. See number one.
[George
Anderson – Moderator]