Don't Slash Prices, Do In Store Promotions

Yes, buyers may be looking for bargains, but they also value a fun and entertaining shopping experience. If you provide that, the customers will come.

First, use your POS system to assess customer purchase and return history that verifies customer satisfaction, allowing you to offer new items at preferential pricing that a valued customer might want.

Using information on your customers, their demand and some market intelligence, leverage that knowledge to build a strategic, targeted approach to pricing, promotion, assortment and other crucial merchandising functions.

Take a look at whether the category roles and image items you identify are really perceived that way by your customers. For example, do your traffic drivers actually yield profitable traffic or do they encourage cherry-pickers? The technology you have in your store can help you determine the answer.

Since it costs five times as much to acquire a new customer than to retain an existing one, and dissatisfied customers vote with their feet, smart retailers pay very close attention to customer relations. This means that every employee needs to treat every customer like the precious resource they are, since they are the future of your store.

Once you have set up your store based on the above, it's time to get the customers in. The LA Times recently had an article listing some examples of in-store promotions currently being used by retailers. These will give you some ideas on how to create your own in-store promotions. These include:

• Holding parties, offering loyalty discounts, providing classes and career counseling to get customers in door.
• Brooklyn Mercantile has teamed up with a local nurse practitioner to offer free blood-pressure and breast cancer screenings. They are also conducting free nutrition workshops
• Boone hosted a cocktail party and book signing and started a rewards program that gives customers a 20% discount every time they spend $500 in her store.
• A local shop offers sewing and craft workshops. They have enlisted a career coach who offers guidance to customers. The shop became a local gathering place for those interested in do-it-yourself activities
• BellJar (San Francisco store sells candles, jewelry, soap, clothing and updated vintage furniture) is throwing parties with specialty cocktails, live entertainment and an "eccentric Victorian photographer" to entice customers. They are also offering exhibits by local artists and free workshops.
• Longfellow Books in Portland, Maine sends out personalized birthday cards with a 25% discount certificate and offers Longfellow Dollars, a rewards program that gives 6% back on every 5 items bought.
• Retailers such as Target and JC Penney are teaming up with high-end designers to offer collections at affordable prices.
• Grocery auctions for bargain-hunters sell leftover or damaged goods from supermarkets, distribution centers and restaurant suppliers.
• Office Depot presents the "Monster Makeover" sweepstakes.
• Kohls unveiled a new marketing campaign alerting customers that "the more you know, the more you Kohl's" which promotes the retailer's exclusive brands and supports the chain's ongoing Kohl's Cares for Kids Program

Keep in mind that once the consumer is in the store, your focus should be on merchandising. Avoid filling racks with discounted products and minimal staff. Merchandisers should move appealing products to the front and promote by using eye-catching displays.

Maintain the value of your retail brand with a clean and well-presented store front. Regardless of the economy, consumers want to enjoy their shopping experience. Make sure your store front is a warm and inviting get-away from the daily economic downturn.

Lastly, keep in touch with your retail results. Use your store technology to know what promotions are effective and where consumer experiences are lacking. Be proactive about making changes to merchandise, prices, and customer service programs. Staying in-tune with your customer is the key to staying on top for 2009.