American dry-goods retailing is a miserable business. Imagine this: You’re the new head of a vast retailing empire — say, J. B. Dimey’s. Sales are soft; competitors nip at every bloodied flank. The Internet thing isn’t working — sure, 46,036 people liked you on Facebook, but this didn’t translate to $1.6 billion in sales like the consultant said. The mall, your postwar redoubt since downtowns withered when the suburbs rose, is starting to feel like a set from the next season of The Walking Dead.
Then there’s the matter of your retail policy: sales. Lots of sales.
The pre-Thanksgiving sale discounts your prices 4 percent off the standard 20 percent year-round markdown, but the Black Friday sale discounts prices 7 percent off the seasonal 24 percent markdown, adjusted for inflation. Sales continue through December, with merchandise marched off to the Clearance rack, where the price is 35 percent off the adjusted standard 20 percent markdown, unless it’s an ugly pair of plaid shorts, in which case the Manual Adjusted Dress Retail Accounting System (MADRAS) calls for the item to be increased 3 percent above the usual discount — if the customer has a coupon and has a charge card AND agrees to take an online survey for the chance to win a visit from someone who comes to your house, takes the shorts, and burns them, because they’re plaid shorts, for heaven’s sake.
After Christmas all the miserable unsold garbage, including the pants with ten zippers — hey, they were big in Japan for a month in 2009 — will be marked down 31 percent from the pre-Thanksgiving price, except for sheets and towels, which are marked down during the Presidents’ Day clearance, when mittens are actually increased 2 percent to compensate for the loss-leader markdowns in the Tires and Galoshes department.
But hey, people think: Ten percent off! That’s a good deal.
Imagine you’re the boss of all that, and you’re the sort of person who lines up the pencils on the desk in nice straight rows when you’re on the phone. You’d go mad.
That was the problem with Penney’s. They brought in a guy from Apple’s retail arm, where there are no sales, one price, clean stores. The new guy axed the sales, instituted basic prices without gimmicks, and vowed to make the stores cleaner and more appealing.
Sales dropped 30 percent.
That’s bad news for conservatives.
Why? Because we’re nostalgic mopes who remember trips to Penney’s with Mom? Not really, especially if that trip included a mortifying purchase of your first athletic supporter. It has to do with the way people calculate value.