How High-End Stores Expand Their Base To Increase Sales And Profits Without Altering Their Brand
By Mark Anderson
The grass is always greener on the other side of the fence.Citation
Shops that have a less affluent clientele often envy those that deal with high rollers – customers who spend more on big pieces and don’t jump at low-price items available through order gatherers, drop shippers, and grocery stores. But if you talk to a shop that deals primarily with high-end customers, you’ll learn they often wonder how they can get some business at the other end of the budget scale.
Why? One reason is size. There are relatively few high-end customers. It’s a small pond. The people in this category also tend to be susceptible to things like stock market downturns. Schoolteachers, fire fighters, service workers, etc.— they keep buying. Traders and fund managers suddenly spend less, if anything.
Some high-end retailers understand this. Tiffany & Co. sells bracelets for anywhere between $150 and $100,000. That’s like offering Mother’s Day arrangements between $50 and $33,000. And if you visit a Tiffany store before Christmas, you’ll likely notice they’re selling more of those $150 bracelets than anything else.
But luxury retailers have to be careful. If Tiffany starts having sales and promoting $150 items, the brand’s image suffers. Their jewellery, at both ends of the price spectrum, becomes less desirable.
So how can a florist that caters to affluent customers start selling to clients with more modest budgets without losing cachet, customers, and sales?
One option is to use very targeted marketing, combined with “hurdles.” In our industry, it’s generally accepted that recipients spend less than the customers that send to them. Tim Huckabee, president of FloralStrategies, champions making a follow-up call to recipients as a way of reinforcing your commitment to quality.
This is also the perfect time to make recipients, who might not be your current customers, a special offer. Some shops invite them to come back with the container for a discounted “refill”.
This tactic forces customers to do a little work to get the discount. They have to save the container, they have to come to the store, and they have to wait while the arrangement is prepared. All of this removes much of the value that comes with your full price offerings, so a lower price makes sense.
It also deters the customers who are willing to pay full price. It’s unlikely that the high roller who happily pays for the convenience of delivery will start bringing in containers and waiting for your designer to save money.
There are other hurdles you can introduce: pickup only, or pickup only during a certain time, lets you selectively discount to customers who are willing to jump over a hurdle in return for saving money. High-end restaurants use a similar concept to reach more customers; they offer discounts to people willing to eat before or after peak periods.