pricing

Employee Insights

Updates from the bottom rung

Karin Allen

Cabela’s Outfitter• Gifts & Fudge - Grand Junction •March 29, 2013

QUALITY   PRODUCTS             AND   SERVICES

“The strength of our brand is built on a foundation of high-quality standards.”

Tommy Milner

President and CEO

Pricing Policy

Why are we playing this losing game?

CORE VALUE:  INTEGRITY & HONESTY

Cabela’s Brand Products

  I remember when gore-tex first came out.  My first gore-tex jacket was a Cabela’s brand because I knew I was getting great quality and innovation at a good value.  I think I had to fit into a men’s small because women’s sizes weren’t available back then.

  The new “stitched in” tag line is a brilliant stroke of  marketing, truly taking our branding to a new level.  It meshes seamlessly with the new “It’s in your Nature” campaign.  In this brave new world of  retail insanity and competition, Cabela’s has all of the advantages; our own branded products, our own internet and catalog sales tools and outfitters able to give personal customer service on the sales floor. We even have our own credit card so customers can pay us interest on their purchases.

Price Wars

So why are we constantly competing with ourselves on price, and losing? 

Every day, all day long, I hear price discrepancies over the radio. The item is ringing up $$ and the customer said he saw a sign for $.  Most of these conversations end up with the customer getting a discount for any multitude of reasons.  

I have also seen many times where items are on sale in the catalog or on line and not in the store. After doing research, the customer comes to the store to buy the product (often from a distance) because they want to touch the item and see it and ask questions before they buy it. They come for the Cabela’s retail experience.  Then they notice the price is $$ more than the price they came in for.  If the customer brings up the discrepancy, they are usually given the lesser price.  These discrepancies create a disconnect that does not foster trust with the customer.  Placing the burden of pointing out these discrepancies squarely on the customer’s shoulders is a disservice - the opposite of customer service.  It also places the outfitter or cashier squarely in the middle of that uncomfortable, somewhat dishonest space.

 Now let’s discuss the customer that isn’t paying attention at the checkout counter.  That customer will often pay more for trusting  (or lack of attentiveness).  Are we taking advantage of that customer?  

A simple solution: keep pricing consistent 

It takes thousands of employee hours to constantly change prices in the computer and on the shelf.  Task team can’t keep up with it, especially when they are working a roll or some big project.  As a part time outfitter on the floor, I am rarely given any direction in this regard.  I find discrepancies when I am pricing replen items or when it’s slow and I just go around and check price tags. It’s pretty haphazard to put it mildly. It makes little sense to me when prices fluctuate down and back up again.  Anything with a sticky tag gets more “used” looking when you peel and re-stick price labels over and over.  Just this morning, I was approached by a task team member who pointed out a price increase on a Cabela’s brand item that had the price printed on it.  The price was going up from $19.99 to $24.99.  He said he could make a sign for them and then I could cut off the old price or mark it out with a sharpie or put a sticky tag over it.  I told him it felt dishonest to me and that decision was above my pay grade.   I am aware that retail profitability is a strategic focus area, but that kind of price manipulation is either deceptive or greedy (or both).  They will probably be on “sale” next week for $19.99.

A simple policy of everyday reasonable pricing ( a dollar or two less than suggested retail on name brands and consistent reasonably competitive pricing on store brands) would have to be more profitable and honest in the long run.  Raising and lowering prices here and there every week just creates more work and more room for mistakes.  I’m not suggesting never to change a price, but it seems to be completely excessive and unproductive.  Yes, we can have sales, but remember to keep it simple, clear and honest.

A policy of price-matching is OK because it allows the serious shopper the luxury of doing the work.  If they would rather buy from us, let them.  These cases are fairly rare compared to the amount of profit lost because we can’t get our floor pricing to match the computer pricing.  

Cabela’s customers shop at Cabela’s for the experience, the customer service, the quality of products.  Price is not the first reason people shop here.  We don’t have to play price war games with ourselves here.  It’s a waste of time, energy and money and it is not customer friendly.