Imagine going to the doctor with no real ailments. But wanting to feel better, you ask for a prescription of cocaine.
Cocaine may solve a short term need but it has long term negative effects. Cocaine is not the answer. Proper diet and exercise is.
Discounting works the same way. It's never the real answer.
Yet, discounting is so appealing. It works so wonderfully well.
Put something on sale and customers buy it.
Sales spike.
Business is thriving...or so it seems.
Discounting is exactly like cocaine. It is less effective each and every time you snort it. The initial high is never as good as that first time. Eventually, customers don't even buy unless there's a discount.
Business erodes.
Profits sink.
Sickness prevails.
The retail industry has become heavily addicted to discounting.
In the battlefield of retail, businesses look for reasonable excuses to put another sale on the window. The traditional reasons to buy for Valentines Day, Easter, Summer break, Back to School, and Christmas are too far apart. Retail needs other reasons to keep customers coming within the two months of each occasion.
Those reasons feed the addiction. The addiction to looking for a sale.
Retail started advertising "Black Friday" deals about four years ago in Canada.
It doesn't make sense to me. Black Friday doesn't mean anything to Canadians. Traditionally, Black Friday is the unofficial start to the Christmas shopping season in the United States. It follows American Thanksgiving, as the last Friday of November.
Canadian Thanksgiving is in October. Black Friday is just another Friday. The unofficial start of Christmas shopping in Canada has long been immediately following Remembrance Day.
In an industry where it seems like everyone is addicted to the same drug, it has become the norm for consumers to look for the deal.
And look we will.
Until someone gives us a better deal.
When consumers look for deals, there is no loyalty to brands, products or businesses. The sale becomes transactional.
No wonder retail stores close so frequently.
Their competitive advantage is based on price.
And price is always the easiest and fastest thing to copy.
In the words of Roy Williams, "Most retailers are twitchy little weasels".
My advice to retailers:
Don't be a twitchy little weasel.
Don't be lured in by the powder.
It won't make you feel better long term.
It will kill you.
Come up with a better competitive advantage.
And watch you're coke laced neighbours die off over time.
