October 14, 2015
What makes a great sale?
A discussion I had last week at the Shop.org Digital Summit in Philadelphia found its way around to the constant barrage of e-mails, commercials and other communications that consumers receive about the latest sales event from retailers selling everything from armoires to zucchini. How many of these events really stand out in the mind of consumers and result in more than a short-term gain (traffic, sales, profits)? The answer based on the small group discussion was: not very many.
In grocery, it was suggested that Publix’s BOGO private label sales met the criteria of a promotion that worked in both the short and long-term. ShopRite’s (Wakefern) Can-Can sale, which promotes its private label canned goods line, was also mentioned as good program. The group found it interesting that the examples that came to mind involved private labels and not national brands.
In truth, our small group struggled to come up with examples of sales events that were real difference makers. Perhaps the criteria was too stringent?
![[Image: Barneys Warehouse Sale]](/public/images/discussions/18603/barneys-sale-still.jpg)
Thinking back to younger years, the one promotion that stood out for me was Barneys New York’s annual warehouse sale. Working in advertising in my mid-twenties at a firm where clothes were believed to make the man or woman, it gave me the opportunity to wear higher quality suits without breaking the bank.
The Barneys event, in my mind, qualified as a great sale for several reasons:
- It provided a clear perception of value that persuaded large crowds of people to shop;
- It regularly fell at the same time on the calendar, leading shoppers to plan their shopping trips on an annual basis;
- The quality of clothing introduced "aspirational" buyers to Barneys, with a percentage eventually trading up to its regular apparel as their careers and incomes advanced.
Discussion Questions
What criteria results in a great sales event in your mind? Are there retailers you can point to that are running great sales?
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Ron Margulis
Managing Director, RAM Communications
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It takes more work, but in many cases I think retailers are better off focusing on events rather than sales. Sure, you have to have sales (and often), but themed events that can be tied in to charities, expert speakers, demos, sampling, other retailers, etc., can bring in customers who aren’t just there for a deal, but for the experience. And really the experience a retailer can offer a potential customer is a better differentiator than another sale.
Value and entertainment top the list. With all the commercial noise out there vying for the attention of today’s consumer, it’s increasingly hard to reach the audience. So retailers need to be really creative in designing sales and then must execute precisely to have an impact. Having literally grown up with ShopRite’s Can-Can sales (my dad was on the Wakefern committee that developed it), that is a great example. ShopRite also had Midnight Madness sales that were very effective because they got the employees engaged and that got the shoppers hyped.
Today’s retailers spend too much time fussing with holiday, BTS, Black Friday and other sales campaigns that every company is doing. There needs to be more of a creative effort to distinguish the sale and the company.
Hmmm … for me it is real savings and real deals, no “0% Financing” signs all over, no requirement to use a specific credit card.
A great sales event is Home Depot’s Black Friday. Really good shop gear at great prices. REI’s annual/seasonal sales are well run and real savings. Ever shopped SAVERS? They support the Boys and Girls Funds of America. They are a step up from Goodwill and have sales that are great. We shop there for cooking gear for our recent college grad kids and new grandkids’ clothing. Getting a Green Bay Packers outfit for a four month old for 50 cents is a steal — perfect condition. SAVERS in nice areas like Scottsdale have great sales.
Last, my own annual garage sale — The MAN SALE. Good deals, any coupon works and I sell good stuff.
A great “sale” is one that survives the ravages of time, competitive responses and the often capricious nature of the shopper. Many “great sales” are also repeatable, thus lending itself to be evaluated as a longer term “campaign” or promotional theme, rather than a one-off promotion.
Traditionally, retailers measure the success of sales by looking at the promotion period and determining if the incremental revenue and profit created by the event exceeded the investment of markdown dollars needed to drive that event. This approach can be very misleading.
More and more, retailers are taking the longer view on sales events, knowing that the payback may not come within that narrow time frame, but rather over longer periods of time. Publix and their BOGO offer a perfect example. Their repeated use, (weekly) affords the opportunity to measure the impact of that program in the longer view, i.e., quantifying transactions that contain one or more BOGO items against transactions that did not — over months and years, not just one week.
As someone much smarter than I once said, “Mark, anyone can give it away.” From that sage advice, I have learned over the years that great sales must deliver real value to the shopper while being structured to create a tangible upside for the retailer and their brand partners. Easier said than done.
Publix runs the best holiday sales of any retailer in recent years. They are memorable and drive business. On the other hand, what was the last car commercial you saw? The probable answer was six of them in 15 minutes of the late news last night. Do we remember (without guessing) what brand or dealer? Adding to that, when was the last weekend without an electronics or car sales event? Do we remember the dealer or store? Chances are the answer is no. Point made. Some brands and dealers believe drowning us in commercials will drive us to their stores. It must be working because they are still doing it.
Since the Bloomingdale’s near my house closed a few years back, I don’t shop Bloomy’s anymore and thus don’t remember the name of the event I’m going to mention. It was “the bomb!”
I would receive an invitation to shop in the evening complete with personal shoppers, wine and free alterations. I saved up my money and any points I may have accumulated for this one event.
What made it so special aside from the wine? The personal shoppers would work with me to put together multiple outfits that could be mixed and matched. Everything could be altered to fit perfectly and voila, I was set.
They don’t make ’em any better than that!
But that’s just my 2 cents.
I’d like to see a focus on the total basket, and if respondents to promotion tend to shop more frequently. With the relatively low production cost of e-flyers I see the messaging more about building rapport and maintaining headspace as much as driving sales to a specific item or two.
I think this article nails it. Many retailers have a sale virtually every week or month. Some stores have sales so often you have to wonder if you’re really getting a sales price, or just the everyday low price. I shopped at a furniture retailer. The sales rep was transparently honest about their sales. She suggested us putting it on hold for a week. They have a promotion virtually every weekend. Maybe that’s part of the sales strategy.
Then there are the true sales. As mentioned in the article, Barneys was annual. Today, Nordstrom has the semi-annual sale. Other stores follow this strategy. And when the merchandise goes on sale, it really is at a reduced price.