As the economic situation worsens, conditions on the High Street are becoming tougher.
According to a new survey shoppers are keeping a “tight rein” on their pre-Christmas expenditure, with like-for-like sales lower in November than in the same month last year.
Meanwhile an increasing number of shoppers are choosing to find their gifts online, driving yet more cash away from the High Streets.
Bricks and mortar retailers therefore need to think carefully about ways to encourage both footfall and conversions – and carefully thought out promotions are one of the most important ways in which this can be achieved.
Why should I run promotions?
Christmas is a vitally important period for retailers. Indeed, a surprising number of retail firms rely almost entirely on the festive months to keep them ticking over for much of the rest of the year.
But this year, competition for every pound is fierce. The uncertain economic outlook has meant that consumers are tightening their belts, and many retailers are concerned about reduced spend on the High Street.
The rise of online shopping has also posed significant new problems for bricks and mortar retailers. The number of people choosing to do the Christmas shopping online continues to increase, and this is making trading conditions on the High Street even more difficult.
Well-chosen promotions are an important way in which you can lure customers off the internet and back into your shop.
What promotions might I run?
There is a range of different promotion types, each of which might be suitable in a different set of circumstances. The type of promotion you choose will obviously depend on the nature of your business. Here are some of the main options.
• Price promotions. A price cut on specific items or, in some circumstances, on big selections of stock – for example the Debenhams Blue Cross Sale.
• Coupons. Vouchers, either printed or, for example, on a mobile phone, offering a discount or other promotion on specific items.
• Loss leaders. Products that are sold at a loss in order to encourage other sales. Loss leaders are often placed near the door in order to entice customers into the premises.
• Loyalty schemes. Work particularly well with businesses like cafes or restaurants. Loyalty schemes could take the form of a printed card on which purchases are noted. For every ten purchases, for example, the customer might receive something free.
• Multibuy. Buy one get one free, or a discount on multiple purchases. Multibuy deals are only relevant to specific product types; for example, you probably wouldn’t run a buy one get one free deal on cars.
What else should I remember?
As a retailer you have a range of obligations under the law, some of which relate to price promotions. It is important that you understand these obligations, and that you fulfil them.
Retailers should particularly ensure that they are familiar and compliant with the Sale of Goods Act 1979 and the Distance Selling Regulations. If you are in any doubt about your legal obligations you should seek independent advice.