A Nail in the Retail Coffin?

A few weeks ago, I was speaking with a close acquaintance of mine who happens to own a very successful chain of high-end kitchen supply stores. My question to him was "With all this doom saying about the upcoming holiday shopping season, what are you planning and what do you expect to happen?" His answer, I thought, was the smartest thing I've heard from any retailer recently.

This holiday season, most retailers are bracing for impact. They are slashing their inventory orders, deeply discounting merchandise, and hiring far fewer employees, amongst other cost-cutting measures. For example, if the average consumer is spending $600 this year instead of $1,000, retailers are preparing themselves for a 40% hit. My friend has taken a different approach. His answer: "Everyone is still out there spending money, just a lot less. My strategy is to figure out how to make sure that out of that $600, I get as much of it as I can."

How is he going to to do this? Well, you've probably guessed it--through his brand. By carefully merchandising, positioning, and promoting his stores, he is going to maximize the amount of money a shopper spends while at his store instead of simply accepting the fact that they will spend less.

A high-end brand cannot use deep discounts or tacky promotions to move merchandise without cannibalizing its market position. Instead, one must use a delicate balance of shelving, pricing, and advertising strategies that all form one cohesive approach of motivating the customer to spend just a little more. This is a difficult and potentially dangerous strategy, but for the savvy brand manager, it can make all the difference in a market like this one.