SPECIAL
REPORT
Just Say No
Retailers provide creative strategies for
bypassing sales. By Melissa Knific
“SALE” HAS BECOME the bad four-letter word amongst retailers. Some
say constant discounts establish a false sense of what merchandise should
cost and that shoppers are constantly on the lookout for a better bargain.
“You can’t resort to the ‘sale’ word because your customers are going to ask
for it all the time,” notes Jill Hathaway, owner of Hathaway Shoe in Kansas
City, MO, and J. Hathaway Shoe Boutique in Leawood, KS. Ed Habre, owner
of The Shoe Mill in Portland, OR, explains it like this: If a retailer is operat-
ing within standard profit margins and continues to sell on sale and reduce
profits, he’ll have less money to invest in his merchandise. Not only that, but
repeat sales hurt the brands as well, giving shoppers the idea the product
doesn’t deserve its original price.
Constant sales are a no-no at Kemp’s Shoe Salon & Boutique in Vero
Beach FL, says co-owner and president Meg Offutt, so the retailer devised
an alternative plan to get rid of hard-to-sell product: It opened an outlet. At Sole Comfort in Albuquerque, NM, owner Peg Lucas-Swisher believes
Appropriately named Kemp’s Too, the idea was born in the retailer’s previ- in the idea of “push money,” or offering cash rewards to salespeople for sell-
ous Boca Raton location when the founder decided to use an extra room to ing product that isn’t moving. For example, if a shoe retails for $100, then
house discounted shoes. Every afternoon, an employee would open the room she’ll give the salesperson $10 for a successful sale. “It’s an incentive for
for a few hours and let customers shop; the idea became such a hit that it them to work a bit harder,” she notes. This way, Lucas-Swisher doesn’t have
turned into an overcrowded mess. Eventually, the staff decided that opening to mark down the product, thus eliminating the possibility of devaluing her
a separate outlet location was the best option. merchandise. She’s also held contests where the staff member who sells the
“The most profitable and productive way to dispose of excess inventory most shoes in a given period will get a paid day off work.
is in outlet stores,” asserts Steven Greenberg, president of retail real estate Retailers say it doesn’t hurt to ask vendors for markdown money or see if
advisory firm The Greenberg Group. Based on information from a recent they’ll take back product that’s a dud. Lucas-Swisher says wholesalers have
study, he estimates 45 percent of women shop at outlets while 35 percent agreed to exchange non-performing product for core items she knows have
shop at malls. “The outlet industry is the fastest-growing sector in retail,” sold well in the past. It’s sometimes the best option, she says, even if it’s nec-
he adds. Greenberg points to Neiman Marcus and Saks Fifth Avenue, which essary to order more in the end. (For exchanging 10,000 pairs, she explains,
have addressed this by opening at least a dozen outlets between the two re- a retailer might have to order 12,000.)
tailers in the last two years. There are, of course, instances where the buy was so bad that the style will
If an outlet isn’t feasible,