Saturday, September 3, 2011

Has Retail Changed Forever?

If you play your cards right in our shop, you can come in, get a free tasting of wine, buy a bottle on promotion at, say, €8, get a further 5% discount if you have a Dalkey Loyalty card and get a stamp on the high-tech-12-stamps-and-you-get-a-free-bottle On the Grapevine card.

And we would be would be very happy to see you!

We, like everyone else, has to keep working hard to get customers and keep customers and I have no problem with that. The question that has been rattling around in my cranium, though, is the question of value. Or, to be more specific, the perception of value.

I have spoken at tedious length about the bogus promotions in supermarkets where many (not all, but many) wines are discounted down to half price. The problem is, the discounted price is the true value of the wine and not the "normal RRP", at which the same wine never sells and, in many cases, is not even offered for sale. In the UK, over 80% of wine is sold on promotion  - anyone got stats on Ireland?

The other phenomenon are the Citydeals/Megadeals/Citymegasuperdeals and whatever you are having yourself. Now, you can think what you like about these, but they are growing exponentially at the moment in a retail environment which has about as much life as the average dodo. Some sectors seem to suit these deals particularly well. Personally, my skin is red raw from too many microdermabrasions, the enamel has been all but stripped from my teeth after so many teeth-whitening treatments and if I have any more eyelash extensions, I could be turned upside down to sweep the floor!

If you have some young wan standing around doing nothing when she could be giving someone a half-price Indian head massage in the hope that you will come back for a second one, I can see it makes sense. If you are lying on a beach in the Algarve and your hotel is being managed by NAMA and the only way to fill rooms is to do a half price deal, then it can be an attractive way of drumming up business.

From the punters point of view, you are getting a great deal, so why not? As I said, this sector is growing hugely and I'm all for it. What it does, though, is reinforce the habit of only buying stuff half price. People don't differentiate between a high margin service industry with lots of capacity available and just buying something in a shop. What do you mean you bought a bottle of wine at its full price? I got a weekend away in the Quality Hotel in Tullamore and I only paid half price!!

Am I being hopelessly naive and old-fashioned to think we can buy a nice product, apply a modest margin and sell it at a fair price? Are those days over?

1 comment:

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