Spring 2008

Sales Despite Slowdown?

Markdown Time

You have followed all the advice, but products are still not moving. Should you be marking down more frequently and aggressively? The short answer: No.

Doug Fleener, president and managing partner of Dynamic Experiences Group, in Lexington, MA, says retailers have to be cautious about sacrificing margins. On the flipside, Fleener does believe that retailers need to mark down “dog” products—those products that just aren’t selling quickly anymore. “What you don’t want during any slowdown is for your inventory to look tired and stale,” he says.

Be creative. Retailer Patti Harbin of In-Courage in San Antonio, TX, doesn’t always mark down merchandise right away, but instead temporarily retires items and puts them away in the stockroom. Over Valentine’s Day, she found that some beautiful heart-shaped box soaps were just not selling very well. Her solution? Put them out back and bring them out in a few weeks with the Mother’s Day things. “They won’t look like Valentine’s Day merchandise when you mix it with the Mother’s Day products,” Harbin points out.

Focus on value

While many independent retailers chant the mantra of customer service as a way to set them apart from the big box stores, will that also help during a slowdown? O’ Boyle, owner of Metro Home Style, says customer service is factored in to the value equation. O’Boyle’s customers are educated and savvy consumers who like to support local businesses. She offers them value for their money: fresh products that are reasonably priced, coupled with excellent customer service. O’Boyle offers complimentary gift wrap. She has struck a special partnership with a neighboring coffee shop and gives her customers a coupon for a free coffee next door, so they don’t have to wait around while the gifts are being wrapped.

Fleener agrees that while independents have to be competitively priced, they should play up their value proposition (in their marketing, advertising and other messages) as stores to find the best unique products with the best service—the best value for the dollar. “You don’t have to be the least expensive option. What you need to do is to be the best place to shop,” he says.