In a recent AP article on msnbc.com, an observant reporter weighed whether the post-Christmas sell off would create a lingering devaluation of retail products.
"Our sense of what is fair and what is a good deal has changed," said Michal Ann Strahilevitz, professor of marketing at the Golden Gate University's Ageno School of Business. She said that a sale has to be at least 70 percent off to be considered a bargain now.
"Our sense of what is fair and what is a good deal has changed," said Michal Ann Strahilevitz, professor of marketing at the Golden Gate University's Ageno School of Business. She said that a sale has to be at least 70 percent off to be considered a bargain now.
The deep price cuts are making shoppers question the true value of items. If they can get $200 jeans at 60 percent off, will they be willing to pay the original price next fall?
"It is a vicious cycle that no one wants to continue," said Gilbert Harrison, chairman of Financo Inc., an investment banking firm specializing in retailing.
Okay, weak holiday sales result in price-slashing to move inventory. Standard practice, right?
But what if something else was at work here. What if it had to do with credit--but only as a catalyst? The availability of credit has made it easier for buyers to pay more for products than they normally would with cash. So are retail prices "real"?
With the credit crisis, many consumers are avoiding adding credit at all costs. Their value decisions are now "cash" decisions. Could their view of price and value have suddenly changed? If you talk to Sam Bowers, it has. Sam is a nationally recognized economist. His take is the growth of the social media space has optimized price shopping and buyers have become ruthless. As he so often says, "Give me a product and in 30 minutes online I can find five competitors offering the same product and their best prices."
Buyers want what they want, and only what they want--no more and no less. They want it to be easy. And they want the best price. As a retailer, ask yourself, "How many of my products fit this criteria?"
It's interesting to note that when brick and mortar retail sales dropped 20+% in December, online sales rose 4.6%.
"It is a vicious cycle that no one wants to continue," said Gilbert Harrison, chairman of Financo Inc., an investment banking firm specializing in retailing.
Okay, weak holiday sales result in price-slashing to move inventory. Standard practice, right?
But what if something else was at work here. What if it had to do with credit--but only as a catalyst? The availability of credit has made it easier for buyers to pay more for products than they normally would with cash. So are retail prices "real"?
With the credit crisis, many consumers are avoiding adding credit at all costs. Their value decisions are now "cash" decisions. Could their view of price and value have suddenly changed? If you talk to Sam Bowers, it has. Sam is a nationally recognized economist. His take is the growth of the social media space has optimized price shopping and buyers have become ruthless. As he so often says, "Give me a product and in 30 minutes online I can find five competitors offering the same product and their best prices."
Buyers want what they want, and only what they want--no more and no less. They want it to be easy. And they want the best price. As a retailer, ask yourself, "How many of my products fit this criteria?"
It's interesting to note that when brick and mortar retail sales dropped 20+% in December, online sales rose 4.6%.
Posts
