• by Kate Newlin , August 18, 2009

A colleague from P&G said it best: "One generation of marketers has addicted three generations of consumers to the heroin of price promotion."

That addiction has never been more obvious than today as we watch our mailboxes fill with 40, 50, 60%-off offers from nearly every name in the game. The short-term spin: Retailers need comp store sales growth. The longer-term implications? The retail universe will continue to devolve to "okay, available and cheap."

A woman walks into a retailer looking for a designer dress for a cocktail party in Las Vegas. She's offered Anna Sui and Calvin Klein; she loves both. The salesperson goes off to find the perfect accessories as the woman sits in the well-lighted dressing room. The salesperson returns with the receipt and the woman is aghast. It's half the amount she expected -- here's the punch line -- half what she wanted to spend. The salesperson had clipped store coupons, opened a charge account and pulled other sleights of hand to reduce the bill into her perception of submission. But the customer was upset that the salesperson "lied" to get the discounts -- lied to the store that is. She kept the merchandise but it ruined the experience.

The salesperson sliced her own commission, cut the retailer's profit, and by making assumptions, transformed a nascent relationship into an embarrassing financial transaction.

This denigration of the shopping experience happens everyday -- and not just for designer goods. The wholesale wholesaling of retail is the marker of an engine running on empty. We're taking shopping out of the process -- to go straight to buying -- but physical retailers can't compete with the efficiency of the Internet regarding buying.

How do we kick our addiction to price promotion? We must focus on the shopping (not buying) process, enhancing, entrancing, and engaging customers and salespeople in the dance.

1. Retailer, hire fashionista/passionistas.

Instead of training salespeople how to up-sell, hire passionistas who are genuinely excited about the merchandise. Research we conducted for Passion Brands shows that their avocation is their vocation. Rather than hire people based on affordability, how about because they read Vogue and Glamour, are obsessed by "Project Runway" and come to us with a million ideas for in-store make-overs and fashion shows? Genuinely fashion-involved people are creative -- let them be.

2. Brand the experience, differentiate on style and design.

The most salient emotional benefit of shopping is that "lucky" feeling. We can empathize with retailers who resort to the short cut of price promotion to elicit the "lucky" response. However, the folks who work more creatively to prompt the "I'm lucky I found it" reaction through enhanced shopping experiences win social and financial capital. When improved margins, share gain and loyalty are the key metrics, retailer and shopper forge winning strategies through which each feels lucky.

Of course, every so often a sale can generate genuine luck. A great example is the semi-annual sale at Pink. Suddenly you see people all over carrying Pink Sale bags. No other advertising is required as you're aware in the most aspirational way that this savvy store is having a sale.

3. Change the tone, acknowledge the customer knows the economy is challenging.

"Buyers days" and "white sales" are old school marketing -- like nothing is going on that has every retailer panicked. That's goofy.

I tell clients there is no unfocused group person left in the world. Stephen Brown (University of Ulster) says, "Marketers know about consumers, consumers know about marketers, marketers know consumers know about marketers, consumers know marketers know consumers know about marketers."

That being the case, marketers need to acknowledge it. Customers don't want to pay more than someone else. Why not have an "end of the quarter, we have to make our numbers, you have to do your part" sale? Make it fun, festive and fearless in trusting the customer. Hold it after regular business hours, serve snacks and umbrella drinks; engage your best customers.

Customers want a unique proposition. When we offer that through service and support, or any of a hundred valid means, we de-average price. Then the challenge becomes to authentically explain why we're doing it and, when we do, "Today only! Free shipping!" will cease to the only workable mantra.