Retailing icons like J.C.Penney and Macy's attempted to move away from a special deals/sales model to a fixed everyday low price model and both failed. Where do markets fit in with the whole retail strategy debate?
Macy's acquired the May department stores back in 2006 and attempted to dismantle their coupon based weekly sales system so as to "retrain" their customers. By 2007 they had abandoned the "retraining" and gone back to a modified sales price enticement model. J.C.Penney recruited high profile Apple retail whiz, Ron Johnson, in 2011 who set about changing their weekly sales and coupon model to a fixed price model. But his departure this month after a disastrous 25% drop in 2012 sales has seen a complete re-evaluation of strategies by J.C.Penney.
And if you think the experience of those two retailers makes the picture any clearer consider the successful fixed price/ everyday low price model of our own K-mart and the US giant Walmart. K- Mart has made a roaring success of super low prices on key items and the expectation is that customers can enjoy those prices everyday without having to wait for a special sale. Walmart has a similar philosophy. Just to muddy the waters a little bit further, Walmart have found that in markets like China and Brazil their customers respond to the old-fashioned model of across the board higher prices with super discounts on a select range of goods. So it is obviously a case of "horses for courses".
Of course, attracting customers isn't just about low prices. Unique and new products, a wide choice, and a shopping adventure of discovery are just some of the key ingredients of a popular shopping destination.
A key marketing tool for the top end of the Queen Victoria Market is the Shop The Sheds campaign. Shop The Sheds relies on traders offering a minimum 20% discount on an item or range of items. That was bolstered by a coupon system on Facebook although Facebook now charge for the coupons so QVM have dropped the option. Promotion of Shop The Sheds is through Facebook, other social media like Foursquare, the Marketlife magazine with its 100,000 local distribution, and internal leaflets.
Shop The Sheds is not getting great results and the question needs to be asked - Is a pure discount model the correct way of promoting the top end of QVM? Should we adopt an everyday low price model or should we avoid price reference all together? Traders Representatives and QVM management are currently considering how the campaign might be tweaked to get results. One option we are considering is identifying key products in the market that stand alone as desirable, unique, and competitive without having to adopt a "bargain basement" discount approach. One of the unique things about our market is that it is full of specialty retailers and specialising often leads to innovation and new and exciting products.
As always we rely on traders to feed ideas to us and we welcome your input. If you have a product(s) that meet the "desirable, unique, and competitive" criteria please contact us. Click on the Have Your Say link below, talk to your Trader Representative, or email us.