Tag Archives: Economy

Match Game: Target Set to Match Amazon Pricing Year Round

8 Jan

Brick and mortar retailers are facing increased pressure from their online counterparts. More and more consumers are “showrooming”, the process of going to a physical store, touching and testing a product, then using their smartphones and some apps to find the lowest price available to purchase the product. Many times the lowest price is at on-line retailer. Not only have the brick and mortar stores lost sales, but they have to still pay all the expenses which go along with having a physical location.

Target has apparently had enough of this situation and is aiming directly at one of the on-line “big boys” in battle: Amazon. According to Target’s CEO, Gregg Steinhafel, “We know that our guests often compare prices online.” While going directly at on-line retailers, like Amazon, Target is also going after other brick and mortar companies as well by matching their on-line prices. Target will be matching prices from Amazon.com, BestBuy.com, Toysrus.com and Walmart.com.

The rules for the price match work when “a customer buys a qualifying item at Target and then finds an identical item for less in the following week’s Target circular or within seven days … Target will match the price.” Of course there are other specific rules a customer must follow, and this is where Target will be able to squeeze out of some of the price matches.

According to Target’s rules the “price guarantee states that the price-matched item must be the identical item, brand name, size, weight, color, quantity — and even model number.” The last part is where Target gets the out. There are times when an identical item is made but a retailer may have a different model number than another. This will leave Target a out by telling a customer the product they purchased is not the “exact” same as the one they found on-line.

The frustrated customer can then either try to return the item to Target, which is notorious for being very picky on returns and will store customer information with a third party for possible denial of returns in the future. Or the customer can keep the product, choose to not shop or greatly reduce their shopping at Target and use them as a showroom.

Of course Target could be very customer friendly and match the prices of products which are clearly the same but have the technical, purposefully changed model number. This would be very good customer service, which is another reason customers didn’t buy from a brick and mortar store. From the Market Watch article:

Among shoppers who say they engage in showrooming, 40% say that they actually never intended to shop online, but did so after experiencing poor customer service and support in stores, according to a recent survey by the Kellogg School of Management. Of the 1,900 shoppers surveyed, 59% say they received poor or average service in stores where they recently shopped.

So while matching prices is a big step, if a retailer, on-line or not, doesn’t treat its customers well, they will go elsewhere. Some additional food for thought and the retail business gets even more competitive in the coming year.

 

Source –
Target vows to match Amazon’s prices – Market Watch

Advertisements

Somber Aftermath: 2012 Black Friday Wrap-Up

24 Nov

It’s time to wrap up the series on Black Friday. The 2012 Black Friday event is now a thing of the past. For all the build-up and hype the “official” kickoff to the holiday shopping season is over. What happens now is the number crunching of what impact was felt not only over all in the economy but just how much difference, positive or negative, it made to be open on Thanksgiving.

Some reports so far seem to indicate the early openings may not have resulted in more sales overall. Instead it spread out sales which would have been made at the previously set openings of midnight. From a report on KHOU in Houston, Texas: [1]

“I was expecting it to be more crowded,” Simon said. “Parking was really easy to find. I’ve been looking at my friends’ Facebook statuses and everyone’s been saying it’s pretty empty.”

This can be a bad thing for retailers. The time and effort to get people into the stores early on Thanksgiving night did not translate into the same people continuing to shop through the rest of the morning on Black Friday. There was extra incentive for customers to keep going when they were already exhausted and got what they wanted.  Then factor in the stores to pay for staff to be there and running on Thursday night. Couple those factors in with tired and unhappy employees who were torn away from their families all in the name of profit and  the logical end result a loss for the extra hours being open. At best, financially it is a break even proposal most retailers, no matter how they and their associations will try to spin it.

And there was always the good news of happy shoppers treating each other with joy and happiness. Well maybe not. Reports of gang fights [2], Shootings [3] and Customers pepper spraying authorities [4] were among those from happy customers out and about on Thursday and Friday. Even Victoria’s Secret shoppers were acting like they had ants in their pants. [5] Turns out it they were just eager to get a leg up on each other on a deal for yoga pants. Yes, yoga pants.

One bright note to the whole Thanksgiving Day shopping weekend, is the event known as Small Business Saturday. This one is actually one to get out and support. It encourages customers to spend their time and money with local small businesses on Saturday, November 24. Doing so not only helps “neighbors” who’s lively hood is their own small company, it also helps the local economy and local jobs. If the saying is all politics is local, then all economies are local too and helping them out is American as turkey on Thanksgiving. [6]

References –

  1. Friday shoppers benefit after stores open early on Thursday – KHOU 11
  2. Fight at Woodland Mall – Fox 17
  3. Two People Shot in Fight Over Wal Mart Parking Space – WCTV
  4. Disturbance leads to scare at Westroads Mall – KETV 7
  5. Rush at Victoria’s Secret Pink at Oak Park Mall in Overland Park, Kan. – KSHB 41
  6. Small Business Saturday – SBA.gov

Back in Black: The Black Friday Deals Myth

21 Nov

America has rewarded the continued commercialism of the holidays to companies by going out at these family unfriendly hours and spending more money they do not have. Retailers tell us “Black Friday” marks the beginning of the time when many people spend the most due to Christmas and other holidays where gifts are exchanged.

What many people do not know is the supposed deals on “Black Friday” are simply a myth. In fact, better deals can be found through out the year if people keep an eye out and know what to look for. The Wall Street Journal did some number crunching and found some very interesting data. [1] They partnered with Decide, a consumer-price research firm, and found the following results (from the article):

  • Citizen men’s black watch … the best time to buy it was early March,
  • Decide’s data show the best time to buy Uggs during the holiday-shopping window is in September or October.
  • The best holiday-season time to buy a flat-screen television is in October. Flat-screen televisions also become more expensive closer to Christmas, Decide’s data found.

In fact, there is quite a bit of data in the article showing where the price actually increased on “Black Friday” or through out the holiday shopping season. There are some items which come out out to be a bargain during this time though. Video game systems, especially previous generation versions, get discounted as well as some kitchen appliances. The main items discounted are those which a retailer has over bought expecting a huge run but barely sold any. Those can vary from chain to chain.

Why do people line up outside stores days and days before just to get some specific item?

According to the Wall Street Journal article, “Kurt Salmon, says chains have much more insight into margin and sales than they did in years past because of technology, and they’re using it to carefully craft Black Friday deals that maximize the promotional benefit without wiping out profit.”

And Mr. Salmon isn’t the only one who sees retail companies taking advantage of their new found data and metrics. Arnold Aronson, a former CEO of Batus Retail Group, “They have to provide value on the day, but they engineer it in a way that they can control their own destiny rather than fall victim to it.”

In other words the retailers are no longer the victims, we the buying public are, out of our own willful ignorance.

Source –
Wall Street Journal – Black Friday Myth

Passing the Buck: Stores to be Open on Thanksgiving Day

20 Nov

With Thanksgiving just over a week away, the countdown to “Black Friday” has begun. People are making plans on which stores to hit, when to hit them and which to skip. Retailers wanting to take advantage of consumers ready to spend their money (not all of it hard earned) are preparing to cut into the Thanksgiving holiday and start opening at as early as 8 pm.

And in order to keep the illusion of “Black Friday” deals going, retailers open up at increasingly earlier and earlier hours. Some stores opening on Thanksgiving night. Websites across the internet devoted to Black Friday list the hours of retail stores for eager shoppers to plan their shopping attack.

According to bfads.net[1] there are a total of 11 stores opening at some time on Thanksgiving day. Of those 11, three of the stores (Meijer Thanksgiving, Gander Mountain and Walgreens) will be open before 10 am. Workers at those 11 stores will have to find another day to celebrate Thanksgiving with their family and friends.

Something to keep in mind the next time shopping there or one of their warm and fuzzy commercials plays on the TV or radio.

Workers are not taking this lack of family friendliness lying down. Walmart employees in Los Angeles held a walkout in October and the latest Black Friday walk out builds on that foundation. [2]  The idea is spreading nationally at this point via sites on the internet such as Facebook, Twitter, YouTube and Tmbler.

At this point the number of strikers is small compared to the total number of people employed by Walmart. In fact, Walmart is dismissing the walkout in a statement which “Wal-Mart spokeswoman said the number of workers who are raising concerns is very small and don’t represent the views of the vast majority of its workforce of 1.3 million.”[2]

It’s time customers and companies learn employees are tired of being treated like lemmings. Instead treat them with respect and dignity. For all the stores open on Thanksgiving, how many non-store employees will be with their family and friends all day? How many will be out shopping after they are done eating their Thanksgiving lunch or dinner? This has nothing to do with “class warfare” or the “evil rich”.  It does everything to do with old, traditional American family values. Those same values where are disappearing year-by-year, day-by-day right before our eyes.

According to a recent poll by Think Finance, “Some 45 percent of those polled said the holiday season brings so much financial pressure, they would prefer to skip it altogether. “[3] Many people apparently have no self control and buy into the hype of Black Friday and the whole holiday shopping season to the point it severely stresses them out.

Do consumers demand the stores be open to spend their money? Or is it just the opposite with the stores staying open and marketing (persuading) the consumers they must spend their money on products and services? The answer, as with most things, is somewhere between the two.

 

Source –

  1. bfads.net
  2. CNN – Wal-Mart workers plan Black Friday walkout
  3. CNBC -Why One Poll Says 45% Would Rather Skip Christmas

Dark Horizon: Black Friday History

19 Nov

To begin the journey into Black Friday a bit of a historical perspective is in order to lay the ground work. If one does an internet search for the term “black friday history” thousands of links to sites will be returned each with a rather similar but unique take on the subject. Many of the links I randomly clicked focused on the phrase used when focusing on shopping. However, the phrase was used long before people dashed away to the shopping mall to get the perfect gifts.

The first known use of the phrase “Black Friday” which I could find dated back to 1896 when Ulysses S. Grant was president of the United States [1]. Put in perspective, the current president is number 43 and Grant was number 18. The event centered around two men, James Fisk and Jay Gould, who attempted to corner the gold market. By obtaining as much gold as possible they tried to drive the price to an artificially high amount. However, their plan was discovered and the cost of gold dropped dramatically, which caused their plan to fail. The dramatic rise and fall of prices which resulted in investors losing their money earned the day the label of “Black Friday”.

The next use of of the term I found was when managers at factories noticed the large amount of workers calling in sick the day after Thanksgiving. [2] The number of employees out for the day was apparently so bad it was commented to be almost as bad as the bubonic plague. Not quite the visual of a winter wonderland.

Then around the 1960’s began the idea of using the phrase to describe the beginning of the holiday shopping season. In Philadelphia it was first used again in a negative connotation do describe the traffic nightmare police faced as shoppers descended upon the stores the days following Thanksgiving. [3]

“For downtown merchants throughout the nation, the biggest shopping days normally are the two following Thanksgiving Day. Resulting traffic jams are an irksome problem to the police and, in Philadelphia, it became customary for officers to refer to the post-Thanksgiving days as Black Friday and Black Saturday.”

How did the term go from such negative descriptions to what we know today? If we look right after this officer’s dissenting viewpoint, we can see what could be the birthing of the “Black Friday” we currently know and loath or love.

“Abe S. Rosen, one of the country’s most experienced municipal PR executives … recommended adoption of a positive approach which would convert Black Friday and Black Saturday to Big Friday and Big Saturday.”

While people would go out and do much shopping after Thanksgiving, not everyone had heard of the phrase by 1985. [4] In fact, at the time Black Friday had different regional meanings still. From a Philidelphia Inqiuirer article at the time, Carol Sanger, a spokeswoman for Federated Department Stores in Cincinnati, noted, “Black Friday out here means the day of the Great Flood in 1937.” In fact the National Retail Merchants Association had a statement about Black Friday which said, “Black Friday is not an accepted term in the retail industry and as far as retailers are concerned, it is understood to mean the Friday the stock market crashed in 1929.”

While the retailers wanted to change the name to something else, the idea to take the bad and spin it into something positive to increase sales and revenues is there. It wasn’t until the 1980’s when more and more retailers began to look at spinning the “Black Friday” phrase to their advantage. Eventually the idea of using the old accounting practice of going from red ink to black ink surfaced and was accepted. From there the marketing arms of retail stores took over and the fruit of that labor is all around us now.

An interesting side note, during the Great Depression, Franklin D. Roosevelt thought it was a good idea to move the Thanksgiving up holiday one week to help increase retail sales. [5] What he didn’t expect was a backlash against altering, at the time, one of America’s most cherished holidays. This changing of Thanksgiving celebration caused a split in the days states chose to celebrate the holiday with little to no results of the hoped increase in retail sales. Some even labeled the change as Franksgiving. In that regard, Black Friday doesn’t sound too bad.

Sources –

  1. Wikipedia – Black Friday (1869)
  2. American Public Media Marketplace – The history of Black Friday
  3. Linguist List
  4. Jennifer Lin’s ‘Why the Name ‘Black Friday?’ Uh … Well …” The Philadelphia Inquirer, 30 November 1985, Business, Pg. D08
  5. Wikipedia – Franksgiving

Darkest Hours: Black Friday

16 Nov

Having family members who work in the retail industry I have personally felt the toll this day takes on people. What is it? Why do we respond to it? What is the big deal about Black Friday? Starting next week I will be doing a series on Black Friday. We will explore those questions and more. It is time we find out just what exactly the hype is all about and why our family, friends and neighbors get worked up for just one single shopping day of the year. I look forward to taking the journey into Black Friday with you.