Friday, August 12

Employee Discounts for Everyone! 

This is from a piece I put together for Smart Money magazine:

Why "Employee Discounts for Everyone" Doesn't Cut It in Retail

Shortly after GM invented 'Employee discounts for everyone,' Ford and DaimlerChrysler followed. Now all kinds of retailers are jumping on board.

During the last week of July, Staples came out with a national campaign, offering their 12% employee discount to everyone over the course of a 3-day weekend. CompUSA retail stores offered all customers its employee discounts on notebook and desktop computer purchases. Furniture stores are offering 'employee discounts' to everyone during 24- and 48-hour sales.

The difference between retailers using this strategy and automakers using it, is that retail customers are used to all kinds of different sale, promotion, and discount mechanisms. It's just not that big a deal, whether you call it an "employee discount" or something else. And, thus, it's not going to be nearly as effective as the GM campaign, which was a stellar success in gaining market share and boosting sales volume, if not profit.

[GM’s Employee Discounts For Everyone program improved sales volume to its highest level in 19 years, with the company gaining 41% in sales over the same period a year ago. GM also grabbed 32.8% of the new-car market. That's an amazing success in terms of market share.]

Other retailers and their employee discount strategies (NOT likely to be available to the rest of us anytime soon) include:

Starbucks - Each employee who works 20 or more hours a week gets one free pound of coffee per week.

Blockbuster Video - Free video and games rentals.

Best Buy - Everything at cost + 5%

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