NRF discusses new marketing paradigm
The financial markets soared higher today as they reacted to the news that
retail sales for the three day weekend following Thanksgiving were up 7.2%
over last year, including a 10.6 billion dollar haul on Black Friday alone.
Stocks rose broadly on the... What? The market is way down again? Crap.
Just what the heck is up with that, Ms Tracy Mullin, President and CEO of the National Retail Federation?
"Well, Mark, since you write a blog, I would be more than pleased to answer your question. There's a lot of reasons for the ways that markets behave. For example, you could look at today's report on manufacturing activity, which just reached it's lowest levels since May 1982."
Wow, Ms Mullin, that's hardly encouraging.
"It's not! Oh my goodness, no! And you know, construction spending dropped another 1.2%, bankruptcy filings are going through the roof, and the US automakers are introducing startling new innovations like side steps and built in toolboxes on their trucks, hee hee hee... I could go on and on."
"Okay, there are psychological factors to consider as well. Take the National Bureau of Economic Research releasing their report today which says that the U.S. is in a recession, and has been for the last year. I mean, duh! Who didn't know that?"
I don't know, Tracy, I suppose that could scare off some of the small investors...
"Hee hee hee, small investors. That is so cute, Mister Hoback. You know, sometimes I read your blog and it's almost like you're trying to be funny."
Kinda like Maureen Dowd, I guess?
"Maureen Dowd is trying to be funny? Huh... Anyway, I guess what you really want to know is what effect retail sales are having on the economy. It's like this. The markets, for example, look at the Black Friday figures, and they don't see the 10.6 billion dollars of sales, they see the 19.7 billion dollars worth of inventory we just blew through."
Holy cow, how can you be profitable with figures like that?
"Volume, hee hee hee... That's an old retail joke. See, the inventory blowout was just the first step in our overall strategy. We had way too much inventory, even though the retail industry cut back orders by about 20% from last year. Particularly for clothes and personal items, a lot of what we sold this year was excess inventory the liquidators couldn't handle. But mark it down 60% and it just walks right out the door."
So I guess you're saying that it was a net positive.
"Not really, but it coulda been woise, hee hee hee. Anyway, we've still got a lot of inventory, but we don't have many new things coming in. So over the coming weeks, instead of 'Doorbuster Sales', you're going to see a lot of 'Pretty Good Sales'. Nothing you could call profit generating, mind you, but we'll be taking less of a bath. We intend to offset that with layoffs in the purchasing departments, stockers, you know, all the things we don't need as much of right now. Then for the period right before Christmas and a couple of weeks after, expect to see a lot of 'Take It Or Leave It Sales'. It's all pretty exciting."
What exactly is a 'Take It Or Leave It' sale?
"Oh, that's where we mark everything up and then mark it back down to the regular retail price. That's when we really expect to see a return to profitability, particularly with the cuts in sales associates, credit departments, all that sort of thing. It'll be like, if there is a problem with a product, send it back to the manufacturer and don't bother us with it. And of course, customers are still more than welcome to pay with credit. But put it on your VISA card if you still have one. Don't expect Macy's to finance your worthless ass, hee hee hee..."
"Sure, we expect some retailers to buck the trend, but it's not a real concern since they'll be out of business by February. Then we'll be able to implement our final stage, which is based on a purchasing and stocking methodology developed by Russian retailers in the late 1980s."
Which would be?
"If you've got a couple rubles in your pocket and you see a pair of mittens on the shelf, you better buy them while you can. And try not to whine when you see the length of the line."
©1998, Mark Hoback