Holiday Markdown Pressure

AsktheExpertsQ: The big box stores around me have already started to markdown significantly –- up to 50% off. I know we’re in a shortened season due to the late Thanksgiving, but how much pressure am I under to keep up with these markdowns?

A: You can’t beat them at this game — they’re pros. (Assuming, of course that you’re not a discounter, in which case you can play the same game.) When the market starts making noise about discounts, you need to chime in. This doesn’t mean giving away the farm.

Ask yourself the question: “What are they trying to accomplish?” They’re not doing this to sell discounted merchandise; they want to build traffic. You want the same thing, so pound the drum hard but don’t dump your margin because the big guys aren’t. Think of markdowns as marketing dollars — only spend them when it drives traffic and revenue. This means taking measured, timely markdowns that give customers an excuse to come into your store. Start pounding because this is going to be a fast season!

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avatar About Steve Pruitt

Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Steve’s approach is highly customized; he tailors his analyses to the particular needs and market of each client. His work ties together the merchandising piece of the business with the client’s overall financial goals to increase sales and streamline operations. Steve is also a trusted general business consultant, known for his ability to help retailers plan growth and manage change.
 
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