Retailers warned not to follow department store discounts

Retailers need to look beyond discounting as part of their post-Christmas sales strategy, an expert says, as Myer and David Jones promise to go head to head with record Boxing Day sales.


Brian Walker, managing director of The Retail Doctor Group, says retailers should be focusing their energy on January and February, rather than December, because that is when it counts.


His comments come after department stores Myer and David Jones vowed to go head to head with huge knockdown sales in a bid to woo customers into their stores, starting on Boxing Day.


Myer chief executive Bernie Brookes told The Sydney Morning Herald Myer will launch an aggressive stock-take sale to attract customers, who are “finding it pretty hard to part with their money”.


According to Brookes, Myer’s Boxing Day sales will include an online deal-of-the-day promotion in a bid to give the company “the best results ever”.


“It will look different, be different and fits in line with what people do with ‘deals of a day’ and add a whole new urgency to it,” Brookes said.


Walker says while Boxing Day sales are an important part of any Christmas sales strategy, the smarter retailers will focus on getting their customers to return to them in the New Year.


“You need a very strong promotional offer – things like bag-stuffers and collecting database information. Reward salespeople for the number of email addresses they get,” Walker says.


Walker stresses the importance of value-adding, suggesting gift-wrapping or – for a clothing retailer – an alterations service as ways to “give customers an offer to come back to”.


“Use all the channels to communicate value-added offers, particularly social media channels… The number one trend [for 2012], in my eyes, is cross-channel retailing,” he says.


“One other final comment is to check the inventory situation. Make sure you have the right amount of stock.”


“The idea is that if you’ve got good systems in place to manage and maneuver stock according to your sales forecasts, you shouldn’t have too much dead stock.”


“The name of the game is to get rid of old stock, whatever way you can. Clear it, take the cut and move on.”


Rather than actively promote discounting or stock clear-outs, Walker believes now is the time to zero in on full-margin sales.


“One other point I’d make is to understand your store layout – know where the hotspots are in your store and present stock accordingly,” he says.


Walker identifies customer service as the main area in which larger retailers struggle, describing their approach to customer service as “inconsistent”.


“This move to self-service [as seen by the likes of IKEA] is very frustrating for some consumers – that would be the standout,” he says.


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