Wednesday, 26 May 2010

Special Offer Syndrome – Can Retailers Escape?

chris black and white for blog Put any online retailer, brand or store into any search engine and you will come up with a vast number of sites where, supposedly, you can find a voucher code or special offer.  I say ‘supposedly’ because frequently these codes are expired, filched from affiliate or Sunday supplement offers or restricted to small groups of products.  That notwithstanding you can find some very good offers, it just depends on what you’re looking for and how much time you have to spare to dig and extract the rubbish first before getting to the gold.

Voucher codes have become part of the new online-speak suggesting that most retailers are now discounting to someone, somewhere pretty well all the time.  Forget the twice yearly sale – we are now a nation on sale continuously which inevitably causes huge problems for retailers.  Do they discount early to beat the pack to the detriment of their margins from then on (because they only way forward is down)?  Do they wait and hope that buyers will keep buying at full price and not notice all the others discounters?  Do they start cutting prices right from the start of the season by use of voucher codes at different rates to different publications (hoping they won’t notice) which becomes never ending.

I don’t, of course, have the answers to any of these, but having been in fashion retail for a number of years I know just how dangerous this all is and the necessity of weighing up sliding margins against overstocks.  We are in the middle of a never ending price war – and it doesn’t matter what you sell, someone out there will be offering it for less.

One solution, however has, particularly for the smaller retailer, to be better buying; less trend driven, more thought to the commercial and a balance between what is current and one season only and what will go on from season to season.  Yes trends are important of course but it’s better to buy into them, particularly if in doubt, in a very small way and sell out, then have endless lime green jumpsuits on the sale rail at the end of the season – and I’ve seen that one happen and been astonished that any buyer could think that there were that number of fashion victims out there.

I was put on the spot yesterday by a snap interview (which took place with me on my Blackberry in Selfridges’ doorway on Oxford street) with a major national newspaper discussing trends – how they got out there – who bought into them and why – so if that one appears in print I’ll be certain to let you know.

In the meantime I suspect that there is no escape for now from ‘Special Offer Syndrome’; that each retailer is well and truly ‘hoist with his own petard’ (Hamlet, no less) and that the future answer has to be with customer profiling, analytics and intelligent merchandising.

On a much lighter note my hallway is now littered with the younger son’s ‘stuff’ which won’t fit in his room and which he couldn’t be bothered to put in the ‘dump’ room (which used to be a very nice study) so there it will have to stay until he gets back from his holiday in Cornwall, to be joined on Friday by the daughter’s ‘stuff’ from her trip to South Africa, Australia and New Zealand, most of which I suspect is going to be quite nasty.

One thing I had forgotten, because my kids live away now most of the time, was the sheer volume of noise of their music, totally conflicting with mine.  However I have to say that on Sunday morning I won the competition, blasting out Wagner’s Ride of the Walkure at huge volume on my far higher quality speakers (and subwoofer).  The question now is how long will I hang on to my speakers when they are all back?  And my pc?  And my Nano? 

The answer to that has to be a Eurostar ticket, a packed bag, a set of mini speakers and headphones and the aforesaid Nano well hidden and I’ll be happy to take my music with me and leave them all to it for a long, long while…………………