Small retailers utilizing strategies of big stores for Black Friday
Stephanie Myers | News-Herald
Gifts Unique manager Carolyn Pressley sorts through Christmas collectibles. Pressley said the upcoming season is the busiest time of the year for the shop, which neighbors East Tennessee Discount Drugs in Lenoir City. 'They shop and we have Vera Bradley, so you know that would bring them in too,' Pressley said.
Black Friday is almost here and many local small retailers, following the lead from chain businesses, believe deep discounting is the way to go.
Retailers of all sizes in Loudon County are making preparations before Friday officially kicks off another round of the Christmas shopping season, finalizing employee schedules, hiring seasonal help and, most importantly, critiquing their business strategy.
Though University of Tennessee economics professor Dr. Don Bruce believes the big retailers are finally stepping away from the deep discount strategy, Knox Area Rescue Ministries Thrift Store manager Victoria Holland believes it will work for the recently opened Lenoir City shop.
"It's just to bring people in and to give back to our customers that are always great to us. That 50 percent off sale, that's a good sale," Holland said.
The nature of their business is marked-down merchandise, but the KARM store plans to make additional cuts Friday and Saturday.
"I think major retail stores now are just carrying it over, and everybody is trying to extend that as long as possible," Holland said. "But more or less it's to bring customers in, and everybody's hurting right now. For lot of families in East Tennessee, their Christmas is thrift shopping."
Bruce said after offering deeper and deeper discounts throughout the year and Black Friday, major retailers are turning to different strategies, like mobile phone apps and extended store hours.
"It may have run its course," he said regarding massive sales. "The consumers have gotten so used to these deals and discounts that we expect 80 percent off, or we feel like we haven't gotten a bargain. It's been a chore in the retail community to pull back from some of these deep discounts."
He predicts deep discounting could soon be an approach of the past.
"I think JCPenney was the most extreme case that we saw," Bruce said. "Instead of running these incredible sales every day, what they've done is they've taken away sales and reduced their prices. It's certainly a revolutionary trend in terms of trying to counteract the deep discounting that goes on special occasions like Black Friday. ... There is only so far you can go with that before all of your profit margin is eaten away in an effort to attract the customers."
Bruce thinks shopping revenues will remain about the same as last year.
"I don't have any strong reason to believe things will be dramatically better than they have in recent past," he said. "I don't have any strong reason to believe things will be worst than recent years. That's where we are with the economy - just continued sluggish growth.
"It's not as good as what people would like it to be but better than what we've had," Bruce said. "But it is well below our usual post recession growth trend."
Holland said a thrift shop is competitive with major retailers, especially in the current economic state.
"We have individuals who do just shop retailers primarily and come in to find just special finds, and then we have customers that this is their only means for shopping," she said. "Maybe it's because they feel they don't have the expenses to do that, but also because they don't want to. Why pay that when you can come here and pay a quarter of the cost?
"So, we do have competition, but I think it's just depending on what the person is looking for," Holland said. "If they know they can find it here they will probably come here first."
Other local retailers, like Rick Terry Jewelry Designs, may not be offering discounts for Black Friday, but they are turning to other strategies.
Expressing excitement for a new promotion, store owner Rick Terry said he predicts offering a free iPhone 5, iPad mini or iPad with purchase will increase the store's profit margin seven to nine fold over last year's sales.
"We had a pretty good gross number last year for Black Friday," Terry said. "We usually don't do that. Small retail jewelry stores usually don't do a big gross number on Black Friday. It's the Walmart. It's what has turned into the Target, the Best Buy. Electronics are huge on Black Friday. All of those big box chain stores that's the ones who end up with big numbers on Black Friday, but we've got our fingers crossed."
Terry said now is the busiest time of the year for his business. He hopes the new promotion will bring customers in throughout the season.
"It's Christmas. This is my time of the year that we really do our best numbers. Significant. It's not even close, and the last 10 days from the 14th to the 24th that's really when we do the big numbers," Terry said.
Other small retailers will stick to their regular routine.
Consignment shop now turned full retail store Chic Boutique in Loudon will have select items on sale and will be offering free gifts with a purchase.
"We have some type of sale in the store at all times. We'll do a different category, and we have started doing that leading up to the holiday season," store owner Gail Edwards said, adding the store will have regular hours but will add extra staff Friday.
Though the busiest time of the year is during the change of seasons and Mother's Day, Edwards said Black Friday is still "very important."
"It's the kickoff for holiday buying," she said, adding last year's sales was "slightly above" the year before.
She's banking on a bump for this season. "We're hopeful," Edwards said.