Re-Inventing Retail

From the Co-Founders of The Retail Owners Institute.
Tips | Tactics | Insights on the Business of Retailing.

NPR = Never. Pay. Retail. Bookmark

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A new consumer study by First Insight* confirmed: “Today’s consumers expect discounts every time they shop.”  The documentation of this phenomenon – what we often refer to as “NPR: Never Pay Retail” – is not surprising. But it is quite sobering.

And then there is this (why do we need to be reminded?): In the battle to deliver "what the customers want", discounts offered have to be real! 

Yes, even if your name is Amazon!

A just-released study by the non-profit Consumer Watchdog** reports that Amazon is posting “misleading list prices” on their site that significantly overstate the “discounts” Amazon shoppers receive.

Ugh! What’s a retailer to do? 
Is “pricing credibility” even possible? 

Especially when virtually every consumer expects a discount? 

Or, relies on Amazon for pricing information?

Our conclusion:

In this "crisis of pricing credibility", independent retailers are especially well-positioned to seize this opportunity!

Here's why.

Since the rise of Wal-Mart, then category killers, then Amazon, your competitive edge - your “value proposition” - likely has not been ”lowest price.”

Instead, to survive, you likely have offered one or more of the following:

better selection

more specialized merchandise

more knowledgeable sales staff

more personal customer service

or other benefits that do matter to your best customers.

That's what has enabled you to survive.

Price always matters, of course. 
But credibility and fairness can still be your competitive edge!

Customized Pricing Strategies for Different Customer Groups

First Insight’s study further revealed that Baby Boomers are the most resistant to paying full price. Three out of four Baby Boomers would “definitely not” or “probably not” buy at full price.

If Baby Boomers predominate in your stores, that suggests that an “every day low price” strategy is unlikely to be compelling. Instead, to retain Baby Boomer customers, your competitive edge must be attuned to offering "discounts".

Just make sure that these discounts work for you, too: a loyalty program perhaps (which also provides more customer data), or “special shopper” events, etc.

Among Millennials, however, First Insight found that purchase decisions seem to be driven by factors other than price. Only 35-40% would choose not to purchase at full price.

Focused on Millennials? Clarifying a total “value proposition” that matters to them is imperative.


Links to these studies:
* First Insight, discount expectations
** Consumer Watchdog, Amazon's "misleading" discounts


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About The Co-Founders

Pat Johnson and Dick Outcalt, The Co-Founders of The Retail Owners Institute®, have been called "The Zen masters of retail finance!"

Since 1999, they have been assembling  their proprietary content into a unique self-help website. The Retail Owners Institute is an unmatched resource that assists retailers worldwide with basic financial training, assistance and easy-to-use tools.

Their engaging and empowering how-to resources about the financial levers in retailing are informative, fun(!), and retailer-friendly. Their promise: "Everyone will 'get it'!"

Pat and Dick are recognized experts in strategic retailing. Working only as a team – Outcalt & Johnson: Retail Strategists, LLC – they have been consulting, publishing, and speaking professionally throughout North America since 1990.

They focus exclusively on retail, or wherever retail is involved. They work with CEOs, CFOs, boards and owners of retail operations, as well as manufacturers or wholesalers expanding into retail. And they also are Retail Turnaround Experts.

Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"