"Funny" Economic-Meltdown-Themed Marketing Fails To Impress Consumers
The Wall Street Journal says that big discounts and hilarious bailout-themed marketing has failed impress consumers, and retailers are expecting sales to worsen before they get better. Restoration Hardware launched a "bailout" themed promotion offering $100 off purchases of $400 or more at the home furnishings chain, while Steve Madden posted signs depicting "a declining stock chart and implored shoppers to "Sell Stocks, Buy Shoes."
The deep discounts backfired, says the WSJ:
When they report September sales this week, many retail chains are expected to show big drops in sales at stores open at least year, a key measure of retail performance, according to analysts polled by Thomson Reuters.
Shoppers, it seems, have become jaded:
Some consumers are becoming hardened to retail claims of "last chance" and "final sale." Katie Ertel, 30, a La Jolla, Calif., counselor, said she's begun to tune out. "Every week it's the same 'last minute sale.' Eventually it's like 'Ha, ha. You are not getting me this time,'" said Ms. Ertel.
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Comments:
"The deep discounts backfired, says the WSJ"
No.. that's not what the WSJ says.
To say it "backfired" implies that consumers refused to shop at particular stores because they found the advertising objectionable.
The WSJ article only says that despite the advertising consumer spending is still down. Thats not exactly "backfiring."
The best value being a $100 savings on a purchase of $400 exactly. From Restoration Hardware that might mean a mirror or a small side table that's already been knocked down. I smell savings!
@Farquar:
Backfiring doesn't necessarily mean that the customers got angry. From the companies perspective, it backfires if they lose more money by discounting than they would have otherwise.
So if Restoration Hardware did get more customers by discounting, but not enough more to offset the loss of margin, then I would say it backfired. And I assume that's what the WSJ means.
Dow just topped 10k again.
I don't know. I got a couple of $24.99 chairs, marked down 75%. I like the chairs, damn comfy, padded canvass, 4 positions easy to carry...
"Absolute last day for our fantastic fire sale!!! all leftover inventory will be set on fire, the store will be set on fire. It will be a fiery inferno of missed savings."
@alexawesome: Try telling that to my mother. "But it's on sale!!" seems to be her answer for buying junk.
Hmmm, I have been meaning to buy a horrendously over-priced wall sconce lately.
Ahhh, Restoration Hardware, the Whole Earth Foods of home decor! That's the kind of retail that probably isn't going to be around much longer.
So how is Canada this time of year? I'm still having this itch to move.
@Farquar: Thank you for clearing that up- after reading the article I was still ready to read about the lines up people outside Restoration Hardware picketing anti-bailout rhetoric.
I agree- the example cited isn't exactly backfiring.
My email has been getting hit hard by these lately -- nothing stinks more of pure desperation than ad-agency interpreted economics.
You know, I have a pair of Steve Madden shoes that I really like. Seriously, heels that high should not be that comfortable!
I got them at Marshall's for $15 or $20. When you can beat that deal, I'll definitely come check out your selection. Until then? Eh. Not in my budget.
I think we should SPEND our way out of the financial crisis! That worked really well with the tax-rebates last year, right? Oh wait...
Retailers strategy of poor quality overpriced stuff is quickly becoming irrelevant. When people are wondering if they are going to have a job or not $400 wall sconces or clothing so crappy it will only last a month or two on purpose look rather pointless.
I got this fun one in my inbox at work today...oh how I love PR.
"Vail Resorts Introduces a "Baggage Bailout" for the 2008-2009 Ski Season -- Subsidizing Baggage Fees with $50 per Guest
Guests must purchase a four-day lift ticket, stay at least four nights and book by Dec. 1, 2008.
BROOMFIELD, Colo. - Oct. 6, 2008 - To help offset added airline fees, Vail Resorts (NYSE: MTN) is offering a "Baggage Bailout" for skiers and snowboarders staying at Vail, Beaver Creek, Breckenridge, Keystone and Heavenly this winter. Guests will receive a $50 credit when they book at least a four-day, four-night ski or snowboard vacation by Dec. 1 through Vail Resorts at (866) 949-2573..."
I used to hate it when the local stores in my mall would have these HUGE signs saying "Going Out Of Business Sale!!!" and then the next week "NOT Going Out Of Business Sale!!"
rinse and repeat.
My favorites are always the stores which are perpetually "going out of business". Don't you think people realize after 6 months that you're still there?
There's a mattress store out here that makes a huge deal in their TV and Radio ads about the "Final days of this sale" and the "Last Chance to save"... until they put a different name on the same sale then restart it the next month.
Crying wolf FTW!
@ViperBorg: Anxiously waiting to see if USA's fuck up, will blow here, too. For now, it's not bad, shares fell, but not as enormously as in USA, plus we have positive budget and Canada's debt is getting gradually paid. Hopefully will stay that way.
@Neecy: I have a jewelery in a local shopping mall that has signs ''80% off!!! Last day!!!'' for the last 3 years =P
@m4ximusprim3: Yes, but people take the prices as ''regular'' and start trying to haggle even more ;) People are not stupid.
I used to work at Macy's a while ago and they had a 'big' sale every weekend. In recent years, I've noticed that they've really stepped it up, especially with those coupons they include in every newspaper. But a lot of Macy's sales associates seem to have given up on the hype: most of the time I buy something at Macy's, when I tell them I don't have a coupon, they just reach behind the cash register for a copy of the local newspaper and scan the barcode on the paper. Even they realize all that hype about 'final' and 'limited' sales is getting ridiculous.
Kohls in particular always has a "60% to %70 off everything sale!!1!11!".
Here's an idea... How about good prices in the first place?
@Ajh: Which is precisely why your mother is not my financial adviser. I'm sure she's a lovely woman in other respects, however.
If customers are so jaded by "last chance" and "final days of sale" advertising tactics, then I would love it if customers could stop complaining that "there are no more left in stock" and that things are "completely sold out". STFU and deal with it! Carpe Diem when you see something on sale! Buyers for brands and stores are buying from their suppliers are a much lower quantity, and when they're gone, they're gone.
@Radoman: Because if they just lower the prices from the get-go, no one would notice or realize the prices were lower, and customers would want them to actually.. be on sale lower. It's like invitations for parties.. you invite 100 expecting 50 to rsvp, and about 25 to show.
well, yeah. last-minute sales are great if you need something but have been putting off getting it for any number of reasons (the primary being that it costs just a little too much). Otherwise, if you don't need it, who cares how cheap it is? Crap is crap, regardless of pricetag.