Retail: Training Customers To Say “I’ll wait.”

I have decided that it would be a good idea to start a professional blog so that I can simply state my opinion on things going on around me. This will be an evolving blog that focuses on a wide range of topics from business to family to becoming a better person. I greatly appreciate any comments or suggestions you may have as I understand that there are many different viewpoints on the topics that I cover.

For my first post, I would like to briefly discuss something that has been on my mind for some time now: training customers in the wrong ways. As a sales associate at a growing retail department store, Belk, I have encountered a major problem in the retail industry. Before I dive head first into this problem, I want to say that I am a huge fan of the Belk company. I feel that the company has sound ethics, values and policies that impact both its employees and its customers.

Like many companies, Belk is training its customers in a way that I see unfavorable. Its hard to say this when our store alone increased 2011 sales by $1 million dollars over the 2010 year, but it is a problem that should be addressed. Far too often I am asked, “Will this be on sale this weekend?” or I am told “I am interested in this [insert product here], but I will wait to buy it this weekend when there is a coupon out”. Retail department stores have trained their customers to wait.

I did not really realize this problem before I started working in the retail industry. Once I gained some interest in working in retail management, I started following some of the new industry trends and paying attention to some of the industry leaders (and the failing members of the industry also). Lots can be learned from a failing business, especially when they do something “extreme” in an attempt to save the company. One example of this that has been in the spotlight is J.C. Penney. J.C. Penny was founded by James Cash Penney “on the principle of treating customers the way he wanted to be treated himself: fair and square”. J.C. Penney is currently transforming their business operation in a way that most retailers say will not work. “Customers will discover straightfoward Fair and Square Pricing” with month-long promotions. “Month-long promotions”–what a concept. Will this concept keep customers from asking if products are going to go on sale the moment they leave the cash register? Will this increase sales for J.C. Penney? Will customers appreciate the consistency in pricing? All of these questions will be answered with time.

I applaud J.C. Penney for bringing in a new team of top executives (including Ron Johnson who oversaw Apple’s retail strategies) that are not afraid to implement a strategy that could change the industry. This is what the industry needs. It needs change. It needs to be fair to its customers by allowing them the opportunity to receive the same prices no matter what day of the week it is. Customers are not uniform; different people shop at different times during the week, not just on the weekends. It is the retail store’s job to give “fair and square” pricing when the customer deserves it.

For more information on the new strategy of J.C. Penney click here!

Thanks for reading!

Brandon.

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2 thoughts on “Retail: Training Customers To Say “I’ll wait.”

  1. jroselle says:

    Brandon, The big retailers aren’t training the customers. They are already trained. It’s been going on for years. It started because of competition. It’s a long story but I’ll try to give you a condensed version.

    First keep in mind that those sale prices are not really bargains in the true sense of the word. They used to be but they aren’t anymore. There are many factors involved in pricing but here is a close approximation of what honest fair pricing should be. In a brick and mortar store, a fair markup should be 50%. That’s based on retail. You can also state that as 100% based on cost. You’re saying the same thing either way. Again, to keep this concise, that means with all factors (expenses) considered, an 18% discount on the merchandise would put you at break even. When was the last time you jumped out of your chair to rush to the store for an 18% discount? I hope you see where I’m going here.

    Back to “customer training”. Way back when, retail stores each tried to stand for something unique. They did this mostly by having exclusive access to brands. They tried to get you to buy what they had vs the other guys brands. Well, the exclusives ended and they all started to sell the same merchandise. Voila! They’re all trying to sell you the same thing. What’s the best way to compete for my dollars under these circumstances? PRICE! They don’t sell VALUE anymore. They sell price! Discounts!

    Weekends have always been the busiest selling day for retail. They started the discount games on these days when the most people were shopping. And by-the-way, the discounts were legitimate at that time. Now comes one upsmanship to grab the customers. Up go the discounts. Eventually they couldn’t cut the prices anymore and they started to increase the ticket prices so they could raise the discount percentages. Customers ate this up even though the discounts weren’t what I call legitimate. They were based on false (unfair) markups. Brick and mortar retailers cannot consistantly sell merchandise at 60,70, and 80 percent off and survive on “honest” markups.

    Here is the catch-22 they created that addresses your post. The retailers wouldn’t give the discounts on other days of the week. You usually need a coupon to receive the discounts and these are good only the days indicated. So what do I do as a shopper? Am I going to be the sucker that shops on Wednesday and pays full sticker price when I know there will be a lower price on the weekend? Not I!

    Well, that gives the history of how the stores got themselves into the mess. But now I sense they’ve run out of discount gimmicks and discount amounts and have come full circle to what Penny’s is doing. Honest, fair pricing on a constant basis along with true clearance prices on certain merchandise. Ah! There IS something to be said for the “good old days”! I think Penny’s is on to something good here.

    • Thank you for sharing your knowledge of the industry. I am about to begin a career (it may be a short one, who knows) in Retail Management after I graduate from college in December, and I would love to work for a company that wants to put an end to the gimmicks and focus on honest fair pricing and providing excellent customer service EVERY time. Unfortunately, there aren’t many of those retailers out there with those standards. I really like your take on what is happening and the fact that retailers are selling the same things and that means they only have price to compete on is a factor that I did not give much thought to. I strongly feel that the retail industry is destroying itself which is sad due to how much of a good thing it has the potential to be.

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