EDITOR’S NOTE: Apologies for the late post. Travel and online access caused the delay.
Well, we managed to get to the middle of November before the dreaded ‘b word’ started getting thrown around – yes folks, we have officially reached the BLOODBATH time of the year. Just as I know exactly what prices my competitors are charging, so retailers are constantly monitoring what their competition is offering. So, when Dave Middleton goes on LinkedIn to expose what he sees as “crazy price reductions”, you know he’s done his homework.
It can sometimes be tricky for consumers to decipher which price reductions are genuine, and which are manufactured. Which stock is current, and which comprises slightly older lines on clearance? Which lines were originally priced to be promoted soon after landing on shelves? Which products are slow moving, which have retailers simply ordered too much stock of, and when are suppliers and retailers prioritizing volume / market share over profit? A retailer would know which promoted items fall into each category, as it’s their livelihood at stake. So, when a retailer like Dave calls ‘bloodbath’, you know it’s genuine.
Of course, the problem is that there is nothing illegal about any of this activity. It’s a free market, and retailers are completely at liberty to do whatever they want on pricing – whether that’s for the right reasons or not. I can understand the disappointment when new brands are being slashed in price. This has recently happened on several new movie ranges before the film even launches, although that just seems to be standard practice at the moment. It has also happened on ranges that have just hit shelves, where companies have been previewing extended ranges for next year. Does heavy discounting undermine the excitement generated at previews for these ranges?
And whatever else it does, it educates the consumer to wait until the heavy discounting starts. Every year, retailers and consumers play a game of Russian Roulette – and every year, retailers blink first. While they do that, of course consumers will delay purchasing until the prices start to tumble. How much of this is a direct result of Black Friday I don’t know, but if we do end up falling out with the US over tariffs and a trade deal, do you think we can give them Black Friday back and tell them they can keep it …?
Although I have been kicking around the toy industry for a few years, two things never fail to surprise me when the bloodbath starts. The first is the toy industry’s insistence on cutting prices at peak-selling season – something that doesn’t happen with flowers on Valentine’s Day or Mother’s Day, holidays in August or hotels at Christmas. The second is when one of the retailers identified as driving the price reductions is a specialist toy retailer. There was always a belief that grocers and multi-channel retailers were deliberately taking a hit on toys to generate footfall, believing they could make up the loss by selling other items to shoppers. That clearly isn’t the case when a specialist toy retailers is leading the charge. Nevertheless, this happens every year, and unfortunately there doesn’t seem to be any way of stopping it.
Read the rest here.
