Beware of False "Sales"

The other day, I read about a hidden camera investigation that discovered that two retailers were re-labeling products with higher price tags than the original then claiming to mark them down to "liquidation" pricing. How common is this, and is it worth it for retailers?

Coincidentally, I was shopping with a friend this past weekend when I commented that a rack that claimed to offer "buy one, get one half off" blouses had obviously hiked up the price tags of the shirts first, making the supposed deal quite sour indeed. How did I know? Because it's a store I've shopped at before, and am privy to what the pricing normally is.

I understand fine print: the whole idea of grabbing customers in by advertising "SALE" in big letters in the store window, only for them to realize when they get close that below the gargantuan word is a line that reads "on some items", or something to that effect. But downright deception -placing fake tags on product - is just wrong.

As mentioned above, I suspected the possibly deceptive pricing at the store this weekend only because I am a relatively frequent shopper at that retailer. Is it worth it to lose your loyal customers just to grab money from a few unsuspecting one-timers? I'd think not, but perhaps this activity is more prevalent than we realize.

In fairness, this particular hidden camera investigation targeted a pair of retailers (yes, Circuit City was one of them) that were already going out of business (or closing some stores, at least) and were now being handled by liquidators. In the case of Circuit City, the reporters were lucky enough able to compare pricing in the "liquidation" stores with actual, still-in-business Circuit City locations. You can already guess which stores had the better pricing.

Still, hopefully this story will make other retailers think twice before relabeling products before a sale; whether it'll be your last in the business or not. As for consumers, be weary of "liquidation" sales: it appears that you're often better off shopping at regular stores that are offering you regular deals.

The full story of the investigation is a really interesting read, and provides some really useful insight into what could happen once a company is on its last legs. I'll bet you think twice now before you head down to a so-called "liquidation" sale!

Music World to Succumb to Digital Downloading

Sadly, Music World is the latest music retailer to succumb to the growing popularity in digital music downloading. According to a report from the Globe & Mail, the company has filed for bankruptcy. Earlier this year, Sam The Record Man closed the doors to its iconic downtown Toronto Yonge St. location, leaving many a nostalgic baby boomer teary-eyed.

Although it's sad to see the effects that digital downloading is having on traditional music retailers, there's also a positive side to this story. Remember, it isn't that consumers are no longer purchasing music; it's that they're purchasing it in a whole new way. Through digital download Websites like iTunes and Puretracks. Through mobile carrier services that let you download a song straight to your mobile phone. Through custom-made CDs that are played back on a home theatre system and streamed throughout the home. Through satellite radio. Through streaming Internet radio. Through portable devices like the Sonos music system. The list goes on and on, and the opportunities at both retail and the manufacturing level are endless. We're not losing interest in music: it's just the platform for which we access and purchase it that's changing.

It is unfortunate that retailers like Music World and Sam The Record Man are feeling the brunt of this change. But there are others who manage to persevere through the storm, mainly by not focusing solely on music. Like HMV, which has managed to remain strong by expanding its offerings to include things like video games and consoles, and a massive selection of movies at varying (and often attractive) price packages. In August of this year, the retailer dropped the price of some CDs by as much as 33%!

Others have made bold moves to keep music sales up: Wal-Mart, for example, offers CDs like the new number-one Eagles album Long Road Out of Eden, at price parity with the U.S. Even non-traditional music outlets, like Starbucks, are managing to remain in the music game. Coffee house Starbucks has built digital music download stations in some U.S. stores where customers can listen to tracks, and create and purchase a custom CD while they're sipping a latte.

There is a way to stay alive in traditional music retailing: it just takes some really creative thinking outside of the box, and an entirely new business plan.

Music World stores are said to close by early next year. As of today, the company's Website simply brings up a Music World logo, but no content. It's a shame, because I did find the store a great destination for tough-to-find DVDs.

In the words of popular rock band Queen, another one bites the dust...