Dilemma for retailers

Just as Target Corp. announced a sluggish third-quarter on Monday, it also announced a new strategy for luring customers back to its stores.
Price cuts.
That is easier said than done for a company that reported third-quarter earnings of $369 million, a 24 percent drop from a profit of $483 million during the same quarter last year.
The company's total revenue rose to $15.1 billion, a 2 percent increase from $14.8 billion during the same period last year.
But there's no way to hide its weak sales and plummeting credit card business.
They're stuck in a dilemma. Sales are down because people are shopping less. The Minneapolis company wants to lower prices, but this will ultimately cut into its bottom line.
This dilemma is going to ripple through retail companies in the country, especially now that there's talk of a looming deflation.
It is going to be a tough for PR folks to sell the retail industry to consumers because so many people have lost their jobs this year. They're cutting back on spending and doing without that $300 Cuisinart mixer.
I don't know about you, but my family is not doing presents this holiday season.
How does a consumer public relations team get past that and get consumers to not just walk in the door of Target, Macy's and Michaels-- but get them to spend money there.
That's where the key problem is. In the example of Target, consumers might be curious to browse and see if prices are indeed lower. But it doesn't mean they'll spend money on the store's products.
I noticed a similar problem at JcPenney's a few weeks ago. They had a "buy one get one for a $1" on select clothing. But I had to spend $40-$50 to get the deal. I didn't think it was worth it. Judging from people leaving empty-handed others thought the same thing.
This is a serious problem facing retailers and their PR folks this holiday season.
It is going to be a tough holiday season and it will be interesting to look at the various tactics companies use to lure consumers to their products.