Frontofshop


Making sure the price is right


Ian James, chief executive of RetailTribe, explains how pro shop sales can soar if the pricing is right


E


arly this year I wrote about pricing, and how the consumer responds to pricing - or a lack of it - in pro shops. I recommended very clear price marking on


golf balls with full price on sleeves, special dozen’s pricing and even a discounted multi-buy price.


Martin Heggie of Moortown Golf Club and Nick Pope at Isle


of Wedmore are two professionals who have implemented this strategy with the assistance of Peter Durham and his team at Foremost Golf. Despite the awful British summer, with rounds played well down, they have increased sales and margins in the golf ball category. This proves what the major retailers in other sectors already


know: consumers are not good at absolute price judgment, and respond to ‘relative’ pricing, and that they are particularly infl uenced by price anchors. The point-of-sale sign below contains pricing for a sleeve, dozen


and two-dozen balls, and clearly highlights the savings on off er. The consumer now perceives the shop as highly competitive in its pricing. Consider how inexpensive the sleeve price of £11.99 appears compared to the dozen and two-dozen pricing.


Putting theory into practice


So that’s the theory. At Moortown and Isle of Wedmore, consumers understood their professional’s prices to be competitive, and as a result, sales of balls per round were well up. Some golfers took


advantage of the dozen and two-dozen discounts, which lowered the average gross sales margin. However, more golfers took the sleeves at the full price without trying to negotiate a discount, which more than compensated for the margin loss on the dozens. Stock turn was over


doubled, pushing the return on investment through the roof. Strong profi t and cash fl ow was generated while delivering to consumers a ‘price-competitive’ proposition. As you prepare


There is no logic to this feeling, as the dozens are discounted whereas the sleeve is not, but the consumer’s mind is not working logically in absolute terms. The consumer’s mind is infl uenced by a process of ‘relative perception’, whereby the much larger two- dozen price becomes an anchor, making the sleeve price look much more acceptable despite the fact there is no discount on the sleeve.


6 SGBGOLF


for 2013 I strongly recommend a similar pricing strategy in golf balls and gloves; invest in strong, highly visible price displays in-store, and then promote the pricing on professional signage around the club, on the shop window, and in your online marketing.


www.retailtribe.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28