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Published: Sunday, 11/28/2004

Thrill of the bargain hunt

BY MARY-BETH McLAUGHLIN
BLADE BUSINESS WRITER

Her two small daughters in tow, Tina Miller popped into a Gymboree store last week because of the 20 percent off sign in the window.

She left with purchases totaling $150, although she put back a brown and pink jacket for daughter Sophia because it wasn't on sale.

"I just can't bite the bullet. I'll just wait to see if it goes on sale and hope the right size is left," said the Toledo mom. All but two of her purchases were on sale.

There's hardly a store in the area, no matter the type of merchandise or price range, that isn't increasingly trying to attract customers by sales and big markdowns. Those enticements grow bolder as Christmas approaches.

Women especially love such deals, but retailers that don't offer them accuse competitors of artificially inflating prices so they can be marked down. The increasingly deep discounts have some questioning how long retailers can keep marking down items before they lose money.

"Retailers are digging themselves into a hole," said Candace Corlett, principal with WSL Strategic Retail in New York. "It's tough to make money on a price strategy."

Although it's true that some stores may lose profits on some merchandise, especially on this holiday weekend, "overall they will make up the difference in extra items people purchase," said Ellen Tolley, a spokesman for the National Retail Federation in Washington.

"Depending upon the item and the sale, discounting can either cut profits or stores can take a loss on merchandise," she said. But overall, stores don't lose money in discounting because consumers may not have purchased the merchandise otherwise.

The sales and the popularity of the Internet mean a growing body of savvy shoppers expecting such deals, said Ms. Corlett, the consultant. People take pride in finding a great price on merchandise, she added.

Surveys by the retail federation found women are more likely to shop often and to think through their purchases thoroughly. "Men are more likely to want to get in and out. Women are more likely to go hunting for bargains," said Ms. Tolley.

That was the case with Fostoria resident Mary Steyer, who was beaming last week after finding a dress for a Dec. 30 wedding at 50 percent off the regular price at a Dillard's department store.

"Buying a dress on sale was important to me," she said. "It had to be at least 40 percent off or more."

Mrs. Steyer, shopping with daughter Donna, said that about the only items she will pay full price for are brand-name groceries.

"Anything else, I'm at the sale rack," she said.

She typifies today's consumers, who seek out a deal and enjoy the purchasing, said Susan Kleine, an associate professor of marketing at Bowling Green State University who has studied buyer behavior.

"It's shopping as entertainment," she said.

Jami Baker, the full-time assistant manager at Gymboree, said customers have come to expect discounts on lines of clothing that are rotated every three weeks.

"If they come in looking for a sale, they often veer toward some of the full-priced stuff," she said.

Buying on sale is a way of life for Anita Mann, of Swanton, an employee of Target Corp.

"I don't buy it unless it's on sale. It's all about trying to make my buck go the farthest," she explained. She was shopping at a Lane Bryant store last week, eager to use coupons she had been sent after making purchases with earlier discounts.

Said Ms. Tolley, of the retail federation, "Retailers are aware that consumers are looking for good deals when they go shopping."

She disputed the perception that retailers deliberately mark up items just to mark them down, especially during the holiday shopping season. Instead, she said, they pick some items to put on sale, knowing they'll make little or no money on those goods, with the hope that those discounts will lure shoppers who will buy other merchandise that is not on sale.

"They know they're going to take a hit on the Barbie doll on the day after Thanksgiving, but [it's worth it] if they sell other items," she said. "Most promotions are honest-to-goodness sales."

Vicki Shamion, director of public relations for the Kohl's Corp., said the Wisconsin retailing giant focuses on discounting and offering proven brands for sale.

Some retailers eschew sales. One is Phil Kajca, owner of J. Foster Jewelers at Westfield Shoppingtown Franklin Park, who said he has not had a sale since opening nine years ago.

"We offer a fair price every day," he said. Still, he conceded that almost every jeweler in the mall is offering gold chains this holiday season for 50 to 80 percent off the retail price.

"It's an uphill battle for me," Mr. Kajca said.

Both Mr. Kajca and Jim Markowiak, owner of Gordon's Gifts Inc. in the mall, said some stores discount items that originally had inflated prices. Mr. Markowiak said he puts merchandise on sale only when he needs to move it, and never on collectibles or high-priced items.

"A lot of my customers don't expect to see sales on these items," he said.

Retail consultant Ms. Corlett said not all retailers use sales to lure customers. Some chains, such as Gap, have succeeded selling items at full price because they have merchandise that is unique or perceived to be worth the money.

The key to that type of strategy, she said, is "you have to really give people terrific value so they say, 'This is priceless' and they're not worried about the [cost]."

Contact Mary-Beth McLaughlin at: mmclaughlin@theblade.com

or 419-724-6199.



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