Executive Briefings

For Some, It Could Be Happy Holiday Indeed as Some Retailers Are Virtually Giving Things Away

Retailers are so desperate this holiday season that they're willing to lose money to get you to spend yours.

Take online jeweler Stauer. It's offering a $249 amethyst necklace for free - provided customers pay the $24.95 it costs to ship it. Stauer will lose money on the deal, but it hopes to reel in new customers who will buy other jewelry.

"In this economy, you have to be outrageous in your offers," said Michael Bisceglia, the president of Stauer, who found that more than a third of customers who took advantage of a similar deal on a $179 pearl necklace in 2009 bought additional items. "You have to shake up the world a bit."

Not every retailer will go as far as giving away merchandise during the holidays, but many will offer profit-busting incentives. It's a critical time of year for merchants, which can make up to 40 percent of their annual revenue in November and December. And they're so worried that Americans are spooked by the weak economy that they're willing to sacrifice profit for sales.

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Retailers are so desperate this holiday season that they're willing to lose money to get you to spend yours.

Take online jeweler Stauer. It's offering a $249 amethyst necklace for free - provided customers pay the $24.95 it costs to ship it. Stauer will lose money on the deal, but it hopes to reel in new customers who will buy other jewelry.

"In this economy, you have to be outrageous in your offers," said Michael Bisceglia, the president of Stauer, who found that more than a third of customers who took advantage of a similar deal on a $179 pearl necklace in 2009 bought additional items. "You have to shake up the world a bit."

Not every retailer will go as far as giving away merchandise during the holidays, but many will offer profit-busting incentives. It's a critical time of year for merchants, which can make up to 40 percent of their annual revenue in November and December. And they're so worried that Americans are spooked by the weak economy that they're willing to sacrifice profit for sales.

Read Full Article