Sales can be a great way for stores to attract customers and move merchandise, but they can also cause problems for businesses that rely on them too much. There's far more to running a successful business or managing a store than simply getting customers in the door, and offering discounted prices too frequently can actually hurt a store's bottom line.
Whether you are the owner of a small business or a manager of a big chain store, here are just a few reasons why you should be careful when you have a sale.
1. You Could Be Conditioning Customers to Expect Lower Prices
Just about everyone knows people who go out of their way to buy only items that are on sale. From the shopper's point of view, this sounds like a smart money-saving strategy, but stores who rely on sales may be spoiling their customers. If customers are constantly buying things at discounted prices from your store, they may begin to expect that they can always get these items without paying full price. Unfortunately for these hopeful customers, your merchandise cannot stay on sale all the time, and when they finally see something at full price it could come as a shock to them. The worst-case scenario when this happens is that they will feel betrayed and stop shopping at your store.
2. Sales Work Best When There is a Steady Clientele
Sales may be a great way to attract new business, but they work best for stores that already have a steady clientele. These are the loyal shoppers who stick with a store even when nothing they need is on sale. They are the lifeblood of any successful retail business, and the revenue they provide is really what makes it possible to put your inventory on sale. If your store has just opened, putting half of your inventory on sale in an ill-advised attempt to attract customers that could hurt your business in the long run.
3. Sales Should be Used to Show Customer Appreciation
Many stores and businesses use discounts and sales to keep customers from shopping elsewhere. This can be dangerous because it causes customers to think they can demand low prices whenever they want them. Instead of using sales to satisfy unhappy customers, use them to reward customer loyalty and show your clients that they are appreciated. That turns them into regular shoppers who will be willing to give you business even when none of the items they regularly purchase is on sale.
Understanding how your customers view what discounts and sales you have is important to being able to increase your overall sales through discounts. Use sales to benefit your company, not harm it.