Retailers have resorted to a new desperate measure to lure in customers - and it may be backfiring
It's no secret that businesses have recently been forced to employ constant sales to attempt to lure consumers with lower prices.
But as more and more retailers struggle to get rid of apparel and boost sales, they've adopted a new strategy in hopes of getting shoppers to purchase goods: putting things on final sale, Elizabeth Holmes of The Wall Street Journal reports.
This strategy, which prohibits shoppers from returning steeply discounted items, could be backfiring.
These so-called final sales run so rampant that they are no longer enough to reel in shoppers, even if they once inspired a sense of urgency in consumers.
Wendy Liebmann, Chief Executive of WSL Strategic Retail, told the Wall Street Journal that "the threat of final sale has really lost its power."
Sometimes, putting apparel on sale isn't even enough to get a consumer to shop.
"Everyone finds themselves in a tough environment, and they're doing what they can to stimulate sales," Nordstrom's president of merchandising, Peter Nordstrom, said on an earnings call in May. "And I think it just depends on your customer. For some, I guess that means price promotion is a lever that's going to really compel their customers. I think what you're hearing from us is that's not the most compelling lever for our customers. So what can we do about that?"
Further, these final sales mean that consumers can't return the apparel - and it's irritating some consumers, Holmes writes.
In fact, one shopper told The Wall Street Journal that final sales make her feel "trapped or manipulated."
This puts retailers in a tricky situation.
After all, retailers are having a hard enough time scaling back on promotions to get consumers to shop at full price. In fact, Gap Inc. CEO Art Peck likened this arduous process to "a game of chicken" during May's earnings call. But apparently, there's such a thing as too much.
It appears that, then, that the best thing for retailers to do is convince consumers that they need to buy apparel at full price - which is hard, since fast fashion companies sell runway-esque apparel at bargain-worthy prices.
"It [excessive discounting] starts to train the customer to expect 30% off or 40% off going forward, and the only way to untrain her is to have a big fashion hit that they happen to buy very little of, and train her to start [shopping] more like [the store was] a fast fashion retailer," Mizuho Securities Managing Director, Betty Chen, told Business Insider in May.