After sales, will shoppers pay full price again?By Anne D'Innocenzio
January 7, 2008
Shoppers are getting used to those 75 percent off sale signs, and that's bad news for merchants who worry they will also have to quickly slash prices on spring goods to attract customers. ...
Already, retailers including Bebe Stores Inc. and J.Crew Group Inc. are cutting prices on selected spring styles to lure sale-savvy shoppers. ...
Merchants struggling to clear out mounds of deeply discounted coats and sweaters are wondering how they are going to get nervous shoppers to splurge on new spring products.
The deep price cuts are making shoppers question the true value of items. If they can get $200 jeans at 60 percent off, will they be willing to pay the original price next fall? "Our sense of what is fair and what is a good deal has changed," said Michal Ann Strahilevitz, professor of marketing at the Golden Gate University's Ageno School of Business. She said that a sale has to be at least 70 percent off to be considered a bargain now. ...
And while spring inventories are estimated to be down as much as 30 percent from year-ago levels, many analysts say that inventories should be down even more. ...
As retailers work to clear out old merchandise, analysts say many are trying to hold back on discounting new winter and spring items. ...But many doubt that such strategies will work and predict early discounts on spring goods. The signs are already there. Bebe has cut certain spring sweaters by 25 percent, while J.Crew has marked some spring items anywhere from 25 to 40 percent off, according to Amy Wilcox Noblin, an analyst at PaliCapital Inc.
It will be years before shoppers are going to be enticed by discounts of less than 50 percent, said C. Britt Beemer, chairman of America's Research Group. ...
As mentioned in the "J.Crew Tries To Reset Price Points {will it work?}" post, I feel like I have been "trained" to see some amazing sale prices, along with some kind of promotion (e.g. free shipping and additional percent off sales). I find it difficult pay full price on a purchase when I think the item isn't "worth" that full price tag and will go "on sale" in just a few weeks. ;)
What are your thoughts on the article and customers inclination to wait for deep discounts? Do you think stores will maintain holiday sales and deals for the rest of the year?
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