Big discounts not enough to prop up store revenue
To drive customers to stores between Thanksgiving and Christmas, many retailers advertised deep discounts.
After Christmas, the discounts continued.
Consumers, on the other hand, had tightened the grips on their wallets because of concerns about job security and declines in their investments and home values.
It's crucial for retailers to plan their buying, sales and discounting strategies for the holiday season, said David Urban, a professor of marketing at Virginia Commonwealth University. But doing so in 2008 was extremely difficult given the state of the economy.
"Generally speaking, retailers want to have enough inventory on hand to meet demand, but not enough to be strapped with a huge amount of merchandise that has to be put on sale at the end of the season," he said.
Seeing the slowdown in sales at the start of the holiday season, many retailers didn't wait and began discounting merchandise in early December.
It didn't seem to boost revenue and made it more difficult to sell after Christmas because, experts say, consumers went looking for deals beyond what retailers already had offered.
Retailers at Chesterfield Towne Center and Short Pump Town Center last week were offering discounts as high as 70 percent to lure customers.
Still, consumers walked around empty-handed, with many saying they expected bigger discounts than were available before the holidays.
Contact Louis Llovio at (804) 649-6348 or .
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My question is, if the consumer is supposed to keep the economy strong by buying things ad infinitum, why do retailers make things so expensive that the consumer can’t afford to buy them? Of course, the consumer is going to wait to see how low can they go, which is probably all the product is worth to begin with. Consumers are tired of being “lured” toward financial doom by retailers and manufacturers that charge too much, even after they outsource the labor. Because we have to pay high prices to get the necessities of life (food, clothing, shelter), we’re opting now to pay low prices for stuff we want to live “the American Dream”. Dreams die hard and if the consumer can pay less to achieve the Dream, I say, more power to them.
People want something for nothing. You can’t find that, so instead they bought just what they needed, not necessarily what they wanted.
Retailers got stuck in the middle of that mental conflict. It’s the de-materialism of the new year.
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