Everything Is On Sale…
It’s true. Damn near everything is on sale – Cars, Houses, Travel deals, Designer Apparel and yes… your products too. I recently has a conversation with an e-commerce specialist and he told me the Full Price retail business was dead. His position was that if you want to sell products at full price, you have to sell the illusion that the products are on Sale. This strategy is nothing new seeing how big box department stores have been running that tactic for years. The truth of the matter however is that the recession is far from over and the Recessionista may possibly be here to stay.
The average consumer is simply forced to change their spending/buying habits out of pure necessity. The jobs aren’t there, the nest egg is gone, the 401k is tapped and the prospects are slim. So when thinking of buying name brand Cereal for $3.99 or the generic brand for $1.99, guess what wins? Even more so when Mom takes Johnny in to buy some tee’s for school. The discount rack starts to seem much more appealing these days. Retailers know it, Consumers know it and Brands are scared of it. Rightly so. With out a customer willing to pay a premium price for a premium product, brands will compete at the bottom for scraps. This is why it is extremely important to maintain strong Brand Value/Perception.
Here is a bit of real world insight… I’ve been skating at the new Dyrdek plaza at Hollenbeck park in East Los Angeles, an area known for being “rough” to say the least. The locals obviously don’t come from high income homes and money for products likes shoes, t’s and skateboards simply isn’t there. However, one thing I noticed about the group of locals is that they all have one or two name brand pieces. Maybe it’s a tee or a beanie. Something small, but name brand. I got to talking about this with my wife and she said that you can really tell who supports what brand when it comes down to spending the little money you may have on that “One” piece. In this case Deathwish/Baker won, since the majority of the kids had an item or two from those companies.
Then I got to thinking. I didn’t grow up with money either and I remember how much it meant to me to get a Name Brand anything. I also took more care of my product since I knew it had to last. I remember buying a tee in the early 90’s that became my uniform for the year. I was so proud to of that damn shirt, it was worth any allowance I had or numerous lawns I had to mow (Kareem Campbell Blue Skateboards tee for any old timers out there).
To bring it all home, the point is this, people have less income now than they did in the past which means each purchase means more. Whether that purchase is to save a buck or two on a box of cereal or to spend two extra bucks on their favorite brand. So before you go and break out those “for sale” signs, try convincing the consumer that your product is worth the extra two bucks. If you can’t I’ll be seeing you at the bargain bins – size large.