Creative Price Reductions to Gain Share
Not too many of us today would like to be in the retail clothing business. Fine retailers world-wide are suffering a dismal decrease in demand. Jos. A. Bank Clothiers has bucked the trend.
Jos. A. Bank used creative discount pricing to grow its same store sales while around them competitors faced margin carnage. For one day in September, and again for a few days after Christmas, the company offered a “buy one suit, get two free” sale. This was just one of its gimmicks. There have been several others. The company’s sales have grown by double digits in the past three quarters, and same store sales have grown at 7%. (See the Perspective, “Achieving the Low Cost Position” on StrategyStreet.com.)
The company is frank about its approach to pricing in this environment. They are looking to gain market share. These pricing gimmicks would not work unless competitors cooperated. The competitors for Jos. A. Bank must allow them to gain share with discounts by refusing to match their pricing promotions. It looks like Jos. A. Bank succeeded here, at the expense of their competitors.