Jack Abelson compares holiday price promotions and extended hours to the futility of punching an immovable object.
As we enter the holiday selling season, one of the overarching themes is the relentless and seemingly insatiable appetite of retailers to miss the opportunity to change their image. At the time of year when natural traffic is greatest, instead of upping their game by improving the in-store experience, they do exactly the opposite by stretching operating hours and relying on even greater price promotions to carry the day. This is literally akin to punching a steel pier and believing a few more blows will bring it down; does the pain in your hand and the failure to move the pier even slightly not tell you something?
For more than three decades, consumers have been assaulted by price promotions which they are led to believe equate to value. To the contrary, price is only one component of value, with many other factors contributing to the buying decision. This is exemplified, rather simply, by asking the value of a garment which does not fit; the answer is zero, regardless of the price. Quality, styling and brand name are but a few of the other reasons people buy, with customer service being extremely important as well. And yet, retailers not only compound the problem by ignoring these other reasons and staying laser-focused on price, but being open ridiculously extra hours, beginning on Thanksgiving Day.
Aside from forgetting the cost to margins engendered by the price reductions necessary to draw the traffic for these insane opening hours (this has been repeatedly proven year after year), does anyone truly believe the total sales for the season will actually increase? How can this possibly be true if a store merely pushes the volume forward through lower prices than what would be paid later by the consumer? This phenomenon began with big boxes, spread to the outlet industry and has now crossed over to regional malls, with several testing the so-called “Midnight Madness” concept this year. The scary aspect of the madness (a truism of the highest order) is that it will spread and become the norm. Why? Because, regardless of actual results, there will be sufficient momentum to expand the concept next year and the year after, etc. This is how a one-day, 12-hour sale became the plaster-your-walls-with-coupons-every-week, “lowest prices of the season,” “one-day sale Friday AND Saturday” (someone please explain this one?!) state of retailing today.
As if there could not be one more reason why this insanity should stop, think of the truly forgotten people in the retail equation, store staffs. Aside from routinely not being paid properly for their work and efforts, not being properly trained to sell (i.e., to do their jobs), and the long hours they already endure, store employees now have to leave their families on Thanksgiving. Anyone who has ever worked a holiday season in retail can tell you how hard it is under the best of circumstances and was even before this crazy hours extension. Added to all this (yes, it does get more horrific) is the fact that stores usually do not add selling hours to cover the extended operating times, but merely stretch their staffs even more, making the poor level of service now experienced on a regular basis that much worse.
To sum up, let’s try to find some logic to the following theory:
We are going to extend operating hours.
We are not going to increase staff levels, only stretch the current levels further.
We are going to offer deep discounts, which by necessity get deeper every year, to entice people to shop these extended hours.
Our margins will suffer due to the price reductions we must offer.
Our overall sales for the season will NOT be significantly higher, if at all.
Does this really seem to be a prescription for prosperity? Seriously? What if, instead, retailers made a conscious choice to make the in-store shopping experience a joy rather than a chore by having a proper level of trained salespeople who actually sell a well curated quality selection of items designed to fulfill the wants and desires of their core customer? Okay, I can dream, can’t I?
Jack Abelson is an industry consultant with many years of experience in the apparel business. His last guest editorial called on Macy’s CEO Terry Lundgren to focus more on customer service. He can be reached at firstname.lastname@example.org.