FrontofshopFRONTOFSHOP
Coping with the Price and Promotion Madness
Ian James, chief executive of Retail Tribe, advises retailers how to best arm themselves in the ‘pricing war’
D
ick’s Sporting Goods superstore has white drivers at £199, £249, £299, £399, £499 and £599. There’s additional confusion with big red ‘reduced’ and ‘you save $ 200’ or £100 signage.
What do Dick’s customers think? There must now be price point
confusion in the minds of the golfers at your club. Does anybody think that 2014 is going to be any less confusing? I don’t, and I wouldn’t believe anyone that told me otherwise. So you need to go into your negotiations with a very clear strategy that you are going to implement.
Can you drop these brands? One of the options available to youis not to include the
brands that are shortening life cycles and accelerating new releases in your selection. Customers who really want those brand’s products can still buy elsewhere, so you will lose some sales. You will switch some customers to brands that you are carrying, and you will gain some increased support from those who feel you are looking aſter their interests. You are going to have to communicate two messages very
clearly and frequently if you are going to tilt the sales equation in your favour: “I can fit a golfer for a better result than technology on its own, however adjustable” and “I am taking a stand for your consumers”.
There is another argument The brands are using a different model. In this model, 15% of
customers buy the product at the highest price to be ‘leaders’. Another 25% will follow and buy at the first price reduction aſter 3 months. At the first clearance price, another 30% will buy. Then the stubborn 30% will wait and be content to buy product that is 2 generations or more behind.
This is easier for you than the mass-market
retailers You can work with this far more easily than the major retailers can, and
here are my recommendations: a. Be prepared to give up some margin with the supplier in exchange for
‘inventory protection’. That is make sure you have a formal agreement. That is choosing to follow the suppliers clearance plan they will present you each time they make a price adjustment or you can return the goods with full credit. b. Negotiate additional marketing support from the supplier to cover the increased marketing and merchandising costs you are going to incur.
6 SGBGOLF
Keeping it simple for your golfers It is my strong belief that the scenario Dick’s Sporting Goods offers its
customer (too many price points on a driver) is not sustainable in a small expert retailer. I think it undermines the position of the PGA Professional as the ‘guide to better golf’ where the product is not themost important component.
www.retailtribe.com c. Unless your demographic is well below that of the average golf club
membership, do not cater for the stubborn 30% by running low price final clearance offers on equipment. d. It is almost mandatory to make an investment in ‘Fitting Theatre’,
strong marketing of your ‘fitting product’, and a very clearly established ‘Fitting Fee’ (even if you then discount the fitting on purchases later) if you are running with these fast moving brands. We have expanded on these thoughts at
www.retailtribe.com/fittingstrategy.
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 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52