If the price is right...
by Fiona Hodge
The issue of price is something I've no doubt the industry is battling with constantly. In tough economic conditions, the temptation is to drop prices to encourage shoppers to spend but then, of course, you start eating into your margins.
Discount retailers are flourishing in the current climate but, in order to compete, do you risk alienating customers by offering inferior product?
Something a number of retailers have told me recently is that, while consumers are still watching every penny, rock-bottom prices are actually not always what they are looking for. Value and getting more for the money they do spend is what is now central to making those considered purchases.
A host of traders have reported a boost in sales of high-end ranges, as shoppers show willing to fork out more for something they know will last. This sentiment was stressed by several speakers at the recent European Home Improvement Forum, including GfK's Oliver Schmitz, who said: "It's not about low prices, it's about more for less." Meanwhile, Kingfisher ceo France/Spain Philippe Tible insisted that, "the concept of price is not something you need at all costs", adding that retailers need to go beyond just focusing on low prices and focus on quality.
Of course, this mindset is nothing new - shoppers will always want quality and, where possible, something more for less, but it does seem to be becoming more prevalent in the current climate, with some retailers taken by surprise at the surge in sales of premium and branded goods. One such example is Leeke's Lee Tiffin who, for reasons he can't explain, has seen big-ticket tool sales go through the roof since December.
Whether this is down to the newly emerging and well-informed shopper who frequents forums and product review sites, or potentially a sign that shoppers are feeling more confident about spending, remains to be seen. Either way, consumers seem to be trading up, so don't neglect your premium lines in favour of budget ranges to try and compete.
While attractive prices may tempt customers in, as always, quality is what is ultimately at the heart of the DIY and garden industry.
Post a comment
DIYWeek.net does not edit comments which are submitted directly by our users to express their own views. Please report abuse of our comment system
here.
