Stores offering discounts based on location
Banana Republic, Wal-Mart and Home Depot are among the retailers that are localizing their sale prices to appeal to the demographics of a store’s location.
It’s a deliberate move to tailor prices to fit local demand and inventory — right down to the individual store level, according to the Wall Street Journal.
For companies like San Francisco-based Gap, it’s helped to improve merchandise margins at its stores, including Banana Republic and Old Navy.
This strategy helps boost profits whenever items selling well in one region offset the need for deeper discounts somewhere else. Analysts say how much, when and where to slash prices can make a big difference to the bottom line.
“What works in Topeka, Kans., doesn’t work in San Francisco,” said John Long of consultancy Kurt Salmon Associates. “You can’t take the peanut butter approach that every store has the same customers and the same competitive issues. Things like pricing become a lever that retailers absolutely have to use.”
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