The Last Black Friday?

Black Friday has come and gone and now retailers are yelling for joy. According to reports Black Friday sales we're up 6.6% from last year. It's a success! But wait, all is not good, "some of the biggest and most rapidly growing components of retailing include segments that we don't really think of as shopping. The biggest retail sector is cars and car parts, which account for about 18 percent of the total; they're up 10.1 percent so far this year. Food and beverage stores — i.e. groceries—constitute about 13.2 percent of sales, and they're up 5.6 percent through the first ten months. Gasoline stations alone account for 11.7 percent of total sales, and their sales are up 19 percent so far in 2011, thanks to higher gas prices. Food service and drinking places account for 10.7 percent of total sales." Inflation rears it's head.

I think this Black Friday may be a watershed moment. Brick and Mortar business, which the day was devised for continue to suffer. How can you sustain a business when your giving away stuff for what you paid for it? A $400 TV for $199 doesn't leave much profit, if any to run on. More and more people are shopping online where the threat of being pepper sprayed while shopping is diminished. The violence we see on TV will cause people to avoid the whole day at the mall, and instead shop from home.

I find Black Friday the antithesis of what the season is suppose to be. Christmas, and the assorted holidays are now just dates on the calendar for many people. A time to spend, spend, spend. It's going to be coming to halt real soon. While anything can happen, I feel we are headed into an era of continued store closings. There are just too many retail stores for the need. It's happening in the nursery business, and many other businesses.

Garden centers and nurseries would be wise to position themselves as the antithesis of Black Friday. Places that calm the nerves, inspire the mind, and provide a locally produced product that increases in value over time.

Sell me your product at a fair price!

Was sent a link to an article titled "Is Groupon Ruining Retail?". Yes, it's that internet coupon service that is all the rage, and a frequent topic here.  My feelings about the service are clear. The person who sent me the link works for a wholesale nursery that is feeling the pinch, as the large wholesale companies dump their product on the box stores and other garden centers.  This has the effect of lowering prices to the point there is little or no profit in selling them. While at first blush the customer feels they are reaping the benefit of this, the end result is it is going to force more small and medium sized businesses out of business. Now inflation is rearing it's head. You have seen food and gas prices rising. That cost has to be either passed on to the customer, or absorbed by the business. With the customer already feeling the pinch most businesses are loathe to raise prices, and possibly scare off the customer. So businesses eat the extra cost and and make less money. The problem is most of these businesses are barely hanging on, and the increased costs mean's many will go under. Less choice for the customer.

Now on top of this we have Groupon which only encourages the whole, "price is the only factor" mentality. The customer thinks they are getting a great deal, yet in the long run they are actually contributing to the whole downward spiral that many small businesses find themselves in. The idea that you will attract a few of these coupon shoppers to become loyal customers is just a false hope. I don't buy it, and it seems a lot more businesses are starting to see it that way. The New York Times article is written by a small business owner that tried the service and finds it less that satisfactory. I love the highest rated comment out of 115 comments as of this morning. The commenter says, "I hate coupons. Sell me your product at a fair price to begin with." Bravo!

What does that mean? Sell  me your product at a fair price. These coupon deals, massive 50 to 75% off sales, and other gimmicks only encourage the idea that we are somehow making too much money. The average person does not work for themselves. They really have no idea what it cost's to run a business, and therefore assume we are pricing our products at a "unfair" price? Unfair to whom? The cash strapped shopper, or the barely hanging on business? As more people leave the corporate workforce and try their hands at running their own business, this will change.

There is nothing wrong with having a sale or discount offered, but why pay Groupon to do it for you? Offer your loyal, regular customers a special now and then. Let the good word spread through your's and the customers social media efforts. These people are already interested in what you have, and are the ones most likely to spread the word.  What a novel, yet simple concept. Offer the customer a fair price regularly for stuff they want. Sure you might not get that rush of people through the door that Groupon would provide, but the people that do come through your door will be more likely to return, and pay a fair price for what you offer. And on top of it you get to stay in business!

Groupon and "OsechiGate"

It's funny how quickly things can turn for a company these days. We have been talking about Groupon, the onlinecoupon service that is "sweeping" the nation, and world.  I was unaware it existed outside the U.S., yet a commenter at this blog points us to Japan and "OsechiGate". What is OsechiGate? According to Fast Company.com, "sales for Groupon and other daily deals sites in Japan are hurting following an incident we'll call 'OsechiGate'--a bad food deal involving osechi, a decadent Japanese New Year's dish. Despite Groupon founder Andrew Mason's video apology to the people of Japan a few weeks ago, Groupon sales dropped 14% over the last month, according to Coupon-Jp(PDF), a consumer research firm in Japan." Follow this link to see what was offered through the Groupon, and what was actually delivered. Why doesn't this surprise me? The Fasctcompany.com article even tries to see the light at the end of the tunnel with, "some pundits thought the event might actually be a publicity boon for Groupon, under the any-press-is-good-press theory, says SocialTimes. But Coupon-jp's report suggests otherwise. Even Groupon clones have been hurting in the wake of the incident."

I have had some tell me that in the right circumstance Groupon is useful for small garden centers. Moving merchandise that isn't selling as fast as they like, end of the season stuff, discontinued items, etc. I'll stick with what we said before about Groupon. If you want to be associated with the type of merchandising that took place in Japan or what happened recently with FTD on Valentines day then by all means use Groupon. Some will say that the quick apology from Groupon's founder after each event shows Groupon get's it when it comes to companies admitting mistakes. Well how often are we going to be hearing apologies about deals gone wrong?

When this kind of stuff happens people start to wonder where to go if everyone is trying to rip you off. According to some, retailers are basically crooks that mark their stuff up only to turn around and put it on sale, and still make a profit. With that kind of publicity what's a small business to do? Many businesses are scared and feel the only way to be noticed is through these coupon deals. Instead try connecting with your customers! Quit listening to the social media experts and PR people who tell us that Groupon or paid Tweets are the way to gain fans. We want to shop at stores where we know the people running the store, and trust them. The only way to gain those kind of fans is through honesty in advertising. Sure there are plenty of people who love Groupon and sites like that, and there are also plenty of people who like to shop at the box stores. Sometimes trying to change their minds is just not worth it. Better to focus on people who's values and needs more closely align with ours.  Let those people spread the word to their friends. That's social media in a nutshell.