Has overpromotion hit a wall?

The topic of whether department stores (and other retailers) are overpromoting is always a provocative one at RetailWire. Here are my recent thoughts on the subject:

JCPenney makes a good cautionary tale about what happens when a promotional department store tries to go “cold turkey” on its sale events. LIke it or not, the customer has been trained to wait for sales for a long time (Gimbels, anyone?) but the difference now seems to be the frequency of margin-busting sale events and extra discounts. JCP’s experience may have scared other retailers away from cleaning up their promotional calendars and risking a volume meltdown.

Certainly retailers like Amazon and Costco drive plenty of volume without being especially promotional. But they operate with different margin requirements (and expense structures) than the typical department or specialty store. So I’m not sure there is an easy answer to the question — but it’s clear that the overpromotion is not driving sales growth.

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