studio thoughts : do sales impede sales?

"As a store owner on Charles street I have seen in a short time a number of small businesses close.... Some new shops have opened, but this kind of continuous change can lead directly to the concerns expressed above. Please remember, liking the idea of small independent shops is simply not enough. You must patronize them regularly or they will go away. If every local found a way to take 5% or 10% of their budget already in use and spent it locally the impact would be fantastic."

Over the past few months I've been researching different Boston neighborhoods so when we finally set up shop we will know we are in the best place we can possibly be.  I've lived in the city since 2004 so I've seen lots of shops come and go, some of them were amazing, but I can't help but wonder, why didn't they last? They were so great!  And that's how I stumbled across the above article, and so it's with that that I cautiously move forward.  Boston is a tough market.  Whenever I'm in New York for business people say to me "you're from Boston? you're doing this in Boston?"  And sometimes I can understand why, we've been a bit slower to jump on the bandwagon with certain things and I guess we aren't exactly known for being "fashion forward", but I honestly think it's changing.  But with those changes the demand to live here goes up and then of course, prices go up.   And that makes it more challenging for small business to enter the marketplace.  So over the past year I have been trying to save and plan for what the next version of rennes will look like.

This season in particular I have received many emails asking if items will go on sale.  Sales in stores happen on a pretty regular basis, usually about 3-4 months after a new collection launches whatever product is left will start at 30% off, then 40%, 50%, 75% - you get the picture.  And that's all fine and good, stores need to move along merchandise and will sell for cost or usually less and that's just how it is; and we (myself included, hello marsell shoes!), have all been known to enjoy a good sale when we can find one.  

But with that said, I have a growing concern about small businesses in ecommerce, and small businesses in general.  I've heard from a few different people that this season has been slow, myself included.   It seems we all expect constant sales all the time, and if we want something that's not currently on sale, we can easily sign up for the mailing list and get 15% off or email the website and see if they will give us a discount.  I think larger stores can keep up with this, but smaller ones can not - some of our merchandise needs to be sold for full price, or a few years down the line, we won't be there anymore.  We need to put things on sale so that we move our product along, but not so much as to make the sale price the norm.  So I wonder, do frequent sales actually impede sales?  Do they affect other stores' sales?  Do sales diminish perceived value?  I don't have any answers, but they are things that have been on my mind a lot lately.

The one idea I've had in opening a brick and mortar is that I want to make it feel like a very special unique place, something that doesn't exist everywhere.  My plan is continue to run the online store as usual, but I really look forward to those tiny in person details that is trickier to replicate online.  For instance, the smell of leather which most everyone who walks in the studio mentions - there is no scratch and sniff website yet I think? (That's actually a horrible idea, nobody should do that).   

Any thoughts?  Ideas?  Feel free to comment below.


Arunasree said...

One of the first things I noted about my Milo wallet was the smell of the leather - surprisingly intoxicating! The end-of-season sale model may work for larger retailers (although perhaps not for J Crew), but I don't think it is a viable model for small businesses. I think the small business model (particularly in fashion) may need to distinguish itself by focusing offerings on unique, well-designed, quality products that embody the "fewer, better" philosophy. I believe customers who share this philosophy will save for Rennes purchases and recognize that these are treasured pieces that put a smile on your face or a spring in your step when used daily. I think the biggest challenge is reaching this type of customer on a scale that will enable the business to be sustainable. Julia, your leather goods are beautiful and useful and you are a talented curator of your online shop! I am sure any brick and mortar shop that you create will be exquisite!

Carissa Schoenick said...

I completely understand where you're coming from. I think the psychology of sales is the real power they can weird for small businesses -- people like to feel that they're getting a slight advantage or a bit of a special reward for researching and deciding to buy online. It's tricky to buy things you've never seen before, there is inherent risk, so a sale can act as that last nudge or justification that finally pushes a hesitating customer over the edge into deciding to buy. Seeing a brand you love finally go on sale also is like a small reward for your vigilance in researching and following the brand. I think that if you can swing it, occasional small sales or short-term, subscriber-only discount code sorts of things would help more than hurt in the long run. And once a customer takes the plunge and has a good experience, they're likely to come back, and to tell their friends.

I think you're right on with trying to curate a special place for your brick and mortar, also -- the experience is the selling point there for sure. I can think of local places I love visiting as well as places I avoid all because of how they manage the environment and the 'culture' of the store.

julia said...

Arunasree - Thank you for your comment and very kind feedback, I'm so glad to hear that you have been enjoying your wallet. I agree with you, I think the best way to succeed is to carry unique things and present them in unusual ways. I do believe in the fewer is better idea and I hope more and more people will decide to save up for one purchase rather than lots of small ones. I think sale season discourages that mentality, and I fall for it too some times: one might buy three of the things they wanted on sale and end up spending as much has they may have on one of those during the rest of the year at full price - but do we really need three? I'm glad that you mentioned scaling because yes! It's super hard to reach that type of customer on a larger scale and I wonder what it will be like if we open a shop. Thank you again for your thoughts!

Carissa - Thank you for your comments and ideas, I appreciate it. That's a really interesting point you made about a reward for researching, do you think that could apply to buying in a brick and mortar too or do you think once you see the product in person the risk is gone? I'm curious because I'm interested in figuring out if it's an online phenomenon and perhaps can be avoided by switching over the B&M. I agree with you completely, I think small occasional / mailing list related sales are good things and a much better approach to constant sales. For a long time this worked well for me, but it feels over the past 4-5 months that has completely changed and since I've heard it from a few people I'm trying to figure out why. Thank you for your ideas!

Carissa Schoenick said...

That's an interesting question about the feeling of reward for researching, and whether it applies to brick and mortar also -- I think it really depends on the profile of the customer. If they are locals who visit often, or at least are able to visit any time, a sale might be an excuse or justification to get something they've been eyeing for a while but hesitating to buy due to cost or perceived indulgence. In that case it's kind of like a reward for "following" your store/brand in person, so to speak. If they're a random tourist walk-in or a visiting long-time fan who is making a special trip, however, a sale maybe won't matter as much in the moment -- they'll either fall in love and buy or they won't, because they know they only have the one chance to get the item in person. They may go home and continue to follow you or think about the product, however, and end up buying it during a sale online later, in which case the "reward for research" thing starts to apply again.

I do think once a buyer is able to see the product in person, the risk is much lower, and the impulse to buy may actually be much higher because they're standing right there trying on or handling the item and the feeling of ownership is already starting. So the sale-as-justification concept seems like the bigger psychological thing going on in that circumstance.

That's also really interesting to hear that the small occasional sales aren't working as well lately. I can't really guess why that would be, unless there is some sort of market saturation or larger economic force happening that I'm not aware of...

Alsia timon said...
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