This reminds me of walking by all the stores here in NY that boast 70% off but then when you look at the price if you have half a brain, you realize that they mark it up 80%.  There is no secret that people love a good deal, but honestly they should stop and think about what they are getting. Makes me think of the quote, “If it’s too good to be true….”. For example, I bet a lot of shoppers out there who love Gilt have no idea that the brand name they think they are buying at 50% off was specially made for Gilt with 50% of the quality. So the customer is actually not getting a full quality product at 50% off but a 50% quality item at a price which is far more than what they should be paying. It’s sad, because people really do get ripped off. I personally would rather pay full price for quality than half price for half the product. So here’s to the independent retailers out there doing honest business!! Keep it up!! : ) -Julia

What is the real price?

Normally at this time of year, I try to avoid the mall like I try and avoid flying the Sunday after Thanksgiving.   Both have about as much appeal to me as listening to a time share presentation.   This year however, my wife and I decided to get some Christmas shopping done while the kids were still in school.

I am fully aware of the state of retail today.   I live it, and am still trying to collect payables that were due 90 days ago.   Business is fragile and in an effort to capture the business, stores started to promote heavily.   What truly distresses me is the amount of the promotion.   But if you step back and really analyze who is doing the most promoting, a pattern emerges.   You have to pretty savvy to detect the pattern but suffice to say that most people(not in the business) will not be able to differentiate the “sales” from one store to another.

I grew up spending many summers on Cape Cod and Nantucket.   There was an old joke I remember from childhood that went something like “A restaurant owner is down by the ferry(on Nantucket) one day and spies a particularly large ferry coming into port loaded with tourists.   He runs back to his restaurant and yells to the cook: Put more water in the chowder”!  The joke always got a laugh and a nod and it is an appropriate metaphor for the way this holiday season has gone.   Stores are putting more water in the chowder in an effort to get more business.

I am completely captivated by the vertically integrated stores such as Jos. A Banks, the Gap, Gymboree and Justice.   Each of these retailers source their own product.  Jos A Banks has been all over the TV and radio promoting such sales as “buy one regularly priced suit and get the second free…or buy one and get any five items in the store for free…or my personal favorite..buy one signature suit at regular price, get an overcoat, two shirts, two ties, and a pair of shoes for free”   Yesterday at the Gap, it was “buy one pair of jeans at 50% off, get any other item in the store for 60% off”.   Justice was offering 50% off and then 40% on top of that.   Gymboree had everything in the store 50% off.   When I worked retail at Macy’s in 1987, the only thing that went 50% off were the tacky Christmas sweaters and vests or Santa ties…but only AFTER Christmas.

To me, this product is all watered down chowder.   We ended up buying a bathing suit for our daughter for under $11 at Gymboree.   I am sure that in April, when we would normally start looking for bathing suits, we would pay full price.   Not now, not anymore.   How are other stores to compete against these sales?   Actually,  the word sale is a misnomer.   A more accurate portrayal is “pricing strategy”.

Back to the chowder example.   If I ate a restaurant where the chowder was watery, I would not go back.   If I can buy product from these stores for next to nothing, why should I ever pay full price?   Here is the rub: the sale price IS the real price.   Anything above the sale price is gravy.

Unfortunately, it is the independent retailer who is really getting hurt by this.   Department stores can issue charge backs, ask for margin assistance checks, or request returns to help the bottom line.   The only respite for  the independent, sell product that people do not mind paying full price for.  Not an easy task, but if you are going to try and compete on price with the vertically integrated stores, better put your money into a restaurant serving clam chowder.

Ken Proctor
Front Man
Twig Footwear, LLC
Ken@twigfootwear.com
www.twigfootwear.com
832-748-1865