OPERANNG OPPORTUNITIES

WALLY LYNCH Paid Associates PO. Box 741623 Dallas, Tx.75243

T Ug OTHER day the conversation

I turned to our industry's currently in vogue "Lowest price guarantees." Anyone who is anybody seems to have such an underwriting.

One recently published guarantee reads as follows: l0% Off All Identical Ads lf every retailer had the same price the same weekend, the customer could nail every merchandising operation in town.

Guaranteed Lowest Prices!

Ifany identical advertised item in any current legitmate ad is lower than our advertised price, we'll slash 100/o off their price; rain checks are not used.

Advertisements must state current retail price, specific manufacturer and model number. Sorry, closeouts and clearances do not qualify.

Obviously the implementor of this policy is admitting and announcing that others might have lower prices. "Don't worry however, because our customers are always protected. Just be sure that the simple rules are obeyed and you'll be better off with us."

Can you imagine retailers like Sears, General Motors or McDonald's jumping into this price demonstration gutter and the "me tooism" depicted?

Let's look at a customer wanting to believe and participate in such nonsense. The purchase considered is a $39.95 chrome single handle faucet. The first thing he has to do is to check everyone's rules before deciding where to buy. Next, he buys the faucet at the store offering the second lowest price; let's say $39.99. He drives 20 miles to get the price, but nails the store for $4.

With such guarantees you don't necessarily have to catch someone higher priced that weekend. You can spend each weekend forevermore searching the newspapers for a legitimate lower price. Then you can drive 20 miles to get your $4 if you can locate someone to approve your claim and you happened to pick the right item to begin with. Just make sure that the manufacturer's name and stock number are in the ad you are using to prove your point.

A full page ad costs about $25,000 in the Los Angeles Times and it takes advertising in 28 newspapers to cover the New York trading area. Can you imagine a retailer accommodating a competitor's "lowest price guarantee" at such costs?

The dealer contemplating this king of the price hill arena should be aware that no one, absolutely no one, can get all the business. Such policies demand challenging, no matter how ludicrous or costly they are, for no other reason than nuisance value by competing retailers. There are positive ways to deal with competition. In the days before the computer did everything, the first thing you learned in retailing was to have a stack of pre-printed "as advertised" show cards on hand. Your assignment was to read competing ads daily and then, before the boss got in the next morning, mark the price for every identical or similar item in the store on a card and place it by the item. The customer and the store benefited in part from everyone's ad.

A second way is to be sure that your staff takes money from each customer and let's him know he is appreciated in the process. Nothing will open your eyes to the significance of this more than testing it at your store and/or at a competitor's.

Go into any department and stand there until a store employee comes up to try to get some money by selling you something. Get a stranger to do it in your store and you do it in someone else's operation. You'll both spend lots of down time wondering.

Finally, value demonstrations to get people into the store go on daily and, on occasion, are loss leaders. But for the most part one formula is to drop the price of the top of line to just above the best selling price point in the assortment. The value is obvious to the customer and leaves the merchant with some margin dollars when the sale is made.

Another method is to pass on the cost savings that suppliers intermittently provide to retailers on well known best selling items.

The trick is to keep your eye on the customer first and then your competitors.

National Home Center Show'88

WEAKER U.S. dollar attracted a growing number of foreign buyers shopping for American-made products to the National Home Center Show in Chicago, Il.

Exhibitors were equally pleased by the high percentage of top management and buyers from major chains attending the show. "Just about every big hitter in the industry came by our booth," said Jerry Sporich, Bruce Hardwood Floors, echoing a popular sentiment.

During the event, David Stanley, chairman and c.e.o. of Payless Cashways, was inducted into the Home

Center Hall of Fame. Stanley joined the company in 1980, building it from 78 stores with $383 million in sales to 1987's 194 stores with $1.77 billion in sales.

Finding exhibitors was easier be-

Story at a Glance

Big brass on hand for annual industry show... exhibitors hap py with traffic. David Stanley inducted into Hall of Fame.

cause of booth locator kiosks positioned throughout the exhibit halls. The Georgia-Pacific-sponsored service featured video screens which instantly displayed maps with booth numbers to find exhibitors alphabetically or by product category.

For the first time the display area expanded into Mccormick Place North, where exhibitors seemed to be happy with the show traffic.

Bill Fishman, a home center consultant and a columnist for this magazine, served as master of ceremonies during the show, held March l3-16.