Loss Leader Pricing in Retail

Loss Leader Pricing in Retail

Originally published on December 10, 2019.

What is Loss Leader Pricing?

Loss leaders in retail are items or merchandise that are offered either at a significant discount, at minimum profit margin, or sometimes even below cost to entice shoppers to make a purchase.

This pricing strategy has been used by many big box retailers and discount stores to encourage impulse buys and has been met with great success.

Simply put, the intention behind this marketing tactic is to bring shoppers in-store and once they’re there, encourage purchases of higher margin items to make up for the profit lost on loss leaders.

Examples of Loss Leader Pricing

You have probably encountered loss leader pricing more often than you would think while shopping. Can you think of a sale that seemed too good to be true? Your local grocery store may have been selling eggs at a steep discount or your favorite clothing brand may have sent you an email advertising their sweaters at a ridiculously low price point. 

These deals may have you thinking “there’s no way that the retailer is making any money on these items”. And in most cases, you’re right! Let’s take a look at some common examples of loss leader pricing in retail. 

1) Grocery Store Staples 

Grocery store staples such as milk, meat, and eggs work really well as loss leaders. Because they are regularly bought commodities, discounts and low prices are sure to attract shoppers. These items are strategically placed at the back of the grocery store to promote impulse purchases. Because shoppers have to walk to the very back of the store to purchase these staple goods, it is likely that they will be enticed to purchase other items as well. 

milk as a loss leader

2) Printers 

Printers are also commonly used as loss leaders to encourage shoppers to purchase complementary items like ink and printer paper. While printers are often sold at or below cost, the price of ink is extremely high. Loss leader pricing is used to get shoppers to purchase the printer, and create the demand for ink which again, is relatively expensive. 

printers as loss leaders

3) Gaming Consoles 

While the price of gaming consoles may seem high, they are actually sold at or below cost. For example, Microsoft Xbox gaming consoles are strategically sold below cost to encourage consumers to buy higher margin video games.

gaming consoles as loss leaders

The Pros and Cons of Loss Leaders

Advantages:

1) Sell Slow Moving Inventory

If you have a slow moving or overstocked inventory item, choosing to price it as a loss leader can help you move it faster. This will result in more shelf space, less inventory, and an increase in cash flow. 

2) Promote Complementary Items

Strategically choosing your loss leaders can help you increase sales of other items in your store. For example, let’s say you’re looking to increase the sale of a certain brand of women’s razor blades. In this case, you would price the associated razor as a loss leader. Once consumers buy the razor that complements those razor blades, they’ll have to come back to purchase the blades as well (which you can choose to sell at a higher margin). 

Disadvantages:

1) May Hurt Your Brand Perception

Drastically discounting items can affect how consumers view your brand. Many shoppers associate lower prices with poor product quality. And overusing loss leader pricing can give consumers the wrong perception of your retail store. Remember people want high quality merchandise at good price points, not garbage.

2) You can Lose Money

There is risk associated with loss leader pricing – which is why you must closely monitor sales of complementary products and of the loss leaders themselves. There is a chance that customers will only purchase the loss leader itself in high quantities. Meaning lower or no sales of complementary, high margin items which results in less profit for your store overall.


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8 Halloween Merchandising Ideas

8 Halloween Merchandising Ideas

With Halloween just around the corner, it’s the most festive time of year for retailers. Halloween merchandising, if done well, can help get your store ready for this fun, spooky holiday. Whether you still need to decorate or just want to add a little something to improve your existing decor, we’re here to share 8 Halloween merchandising idea that are fun, creative, and easy for busy stores to set up.

1. Pumpkin in-store displays

Starting off with this classic Halloween display, you probably already have them in your displays or have used them before. Whether they’re real or fake, they make great displays because they’re automatically associated with Autumn. This means you can keep them past Halloween since they perfect for Thanksgiving too. Placing pumpkins around product displays just adds that little bit of color to give your display that Halloween/Autumn spirit.

Pumpkins on a flower display
(Source)

2. Mannequins

If you already own mannequins in your store, this is a great way to utilize them for the fall season. Mannequins are extremely versatile for Halloween merchandising ideas. You can either decorate it to show off fall outfits ideas using items from your store if you sell clothing.

Mannequins decorated in a Halloween fashion
(Source)

If you don’t sell clothing but still want to use mannequins in your display, you can make it look like a scene from a scary movie, make it funny and lighthearted, or even put a pumpkin head on the mannequins.

Mannequins with Pumpkin heads showing off Autumn fashion lines
(Source)

3. Use products to create Halloween art pieces

If you don’t have a large budget, but still want to decorate your product displays, you can instead use those products to create a fun display such as the soda wall below. But there’s no need to do anything as large as the example below. You can do a smaller design with whatever you have in stock and get creative!

Soda boxes organized to mimic the Scream mask
(Source)

4. Using shadows in Halloween merchandising

This is one of the more ingenious Halloween merchandising ideas – using shadows and silhouettes as decorations. This is definitely a great alternative to buying large and expensive Halloween pieces. They can add dimension and detail to your displays, and as long as you have a light source and a suitable shape to help create the silhouette with. Get as creative as you want and try adjusting the sizing and look of the shadow easily by moving the light source around to get different angles.

Witch statue illuminated to cast a large shadow
(Source)

5. Bat walls on store displays

A bat wall can serve as a perfect background for your product displays since it can take up a large space while adding a halloween look to your store. You can hang bat cutouts from the ceiling using fishing string or other alternatives, put them on some sort of board like the example below, or stick them on display items. Do whatever looks and feels best for your store!

A wall of bats used to decorate a product display
(Source)

6. Halloween Banners

Halloween banners are a simple, festive type of decoration that are easy to set up.

Ghost busters themed "Happy Halloween" banner
(Source)

Look for simple banners that say ‘Happy Halloween” or a strand of small ghosts like the example below. Just hang them next to product displays to ensure that they are visible!

Cut-out ghosts banner
(Source)

7. Candy displays

Halloween isn’t all just about the spooky stuff, especially when trick-or-treating is such a big part of the holiday. If you sell candy, a Halloween-themed sweets section is the best way to sell as much product as possible.

Haunted house themed chocolate display
(Source)

8. Spiders

If you’re looking for a scarier display for your store, try using some creepy crawlies to spice things up. A classic Halloween decoration that will effectively make passersby look and possibly post about your store on social media. Big spiders, small spiders, a lot of them or just a couple, adjust it to your own liking. Spiders just have a way of adding that Halloween feel to any Halloween merchandising display.

Spooky spider front window display
(Source)

To add more to the spider theme, you should consider adding spider webs as well! Spiderwebs themselves still have a very creepy look to them. So don’t be afraid to experiment with different looks such as cobwebs like the one in the example below. The best part of this Halloween merchandising idea is that you can add webs to any display and instantly add a bit of a Halloween flair to it.

Expert Tip: When buying materials for your merchandising displays, look for multi-holiday use. The fabric used for cobwebs can also be re-used again as snow in winter displays after Halloween!

Faux spider webs used to decorate a chandelier
(Source)

We hope you’re ready to get into the spooky spirit this Halloween season. With these Halloween merchandising ideas, we are sure your store will be spooktacular! Don’t forget to check out our previous blog posts such as our Halloween Marketing Resources for free images for your social media posts. Happy Halloween!

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What Is A Social Retail Strategy?

What Is A Social Retail Strategy?

Social media is all around us these days. Everyone from kids to grandparents are on at least one social media platform. So it is important to learn how to use this modern tool to boost your brand both online and in person. In fact, there are strategies for retailers focused around social media. Yes, there is such a thing as a social retail strategy. Today we will take you through what such a strategy is, and why it is important for you to have one in place.

So, what is social retail?

Art of social retail
(Source)

Social retail is an essential part of a modern omnichannel retail strategy. Social retail is using social media to communicate and engage with customers while also selling to them in-store and online. In a nutshell, the strategy succeeds by rewarding customers for sharing products they love. After all, many customers love to share their new purchases and favorite brands on social media. This is especially so when that product or brand aligns with their personality. The idea of social retail is to incentivize your customers to continue doing this – hopefully making it a habit.

For those who are familiar with word-of-mouth (WOM) marketing, social retail is just a modern, digital version. You want customers to be so happy sharing your products that their friends and followers begin to try them out as well.

It’s important to remember that it isn’t only about sharing your brand and products on traditional websites or social media channels. Some of the top performing brands in social retail feature their products on virtual platforms as well, in other words, metaverse retailing. A great example of this are some brands releasing their collections on Bitmoji. Even though they are not yet making money off of Bitmoji users wearing their brands, they are generating a lot of brand awareness.

You should keep in mind that a social retail strategy is not ideal for every type of retailer. Are you selling the type of items people would like to share? Are your customers the type of people to even want to share their purchases? These are some of the questions you should consider before investing in a social retail strategy.

Why you should do it

Illustration of people engaging in word of mouth marketing
(Source)

Whether or not your business has a large social media presence, it’s still common for customers to post about their experience online. If you provide a good experience, customers will advocate for your business and products online. It was found that 92% of consumers believe suggestions from friends and family more than advertising. So maximize this free promotion by having a social retail strategy that includes referrals.

Since social media is a place for people to connect and communicate online, it’s the best place to start or continue building a loyal community for your store. Once a community is established, your community members will be some of the most frequent buyers. They will even act as ambassadors for your store by promoting it to their friends and families. The beauty of the community is that users will inevitably end up building connections and bonds through shared experiences and values. This will boost the positive feelings associated with your brand – reinforcing your brand’s loyal community. Through a brand community paired with the right customer management tools, you’ll get to know your audience more and have better data and understanding on their expectations, wants, and needs.

How to do a social retail strategy

The first step is to decide which social media platforms you will use. It’s always better to use more than one, but take some time to consider which ones your customers are more likely to be active on. When setting up business profiles on each of them, make sure you are tagging your page with common keywords associated with your business. For example if you have a grocery store, you will want to use tags or hashtags such as: grocers, produce, food, etc. On top of that, you want to make sure your profile pictures are consistent across the board. These two steps will really help customers to find your profiles on social platforms.

Example of a social media calendar
Learn how to develop a social media calendar here!

The next step is to start creating content and posting! Make sure that your posts aren’t just random. Schedule them out and organize what type of posts you want and how often you want them uploaded. Create a good mix of promotional content, fun content for engagement, and content that speaks about the values of your brand.

Try to encourage customers to post or tag about your products! You can do this by showcasing their posts on the company account, having photo opportunities in-store for them to post about, hosting small giveaways or events for them to take part in, etc.

Just a reminder, not all of these examples work for all business types! Pick methods you think would work best for your own business. As long as the end goal is to encourage customers to share. Finally start adjusting your accounts and what you post based on feedback & data from your customers.

A social retail strategy is almost a given in 2022. If you haven’t started one yet, now you know why and how you should start. With 59% of the world on social media – you should be investing time and energy into boosting your brand on social and digital channels.


TAKU Retail has all of the tools needed to start selling on social media, and collect data on your customers. These essential tools will help you engage in the ultimate social retail strategy. Start today!

Halloween Marketing Resources

Halloween Marketing Resources

With spooky season right around the corner, retailers should be getting ready. Having a head start on marketing for a holiday is essential. The best retailers prepare at least a month in advance for most holidays. We have created a free resource page with Halloween marketing resources that any business can use!

On the page you will find various materials that you can use in your Halloween communications. This includes: Halloween hashtags, retail promotion ideas, over 20 royalty-free Halloween stock images, color schemes, a spooky Halloween font, and some inspiration for your Halloween displays.

Click here to access the TAKU Halloween marketing resources!


Some of the best marketing opportunities come during various holidays. Staying ahead of your holiday calendar and preparing is the key to boosting your sales. Check out our blog on year-round holiday marketing.

Link to Year-Round Retail Holiday Marketing blog post
Sell More: 3 Thanksgiving Marketing Ideas For Retailers

Sell More: 3 Thanksgiving Marketing Ideas For Retailers

Fall is fast approaching, and for Canadian retailers this means gearing up for the Thanksgiving long weekend. 

Although Canadian Thanksgiving isn’t as closely associated with shopping (compared to the U.S. holiday), retailers can still create a unique experience for shoppers. 

Keep reading to find out how you can gobble up your fair share of sales this Thanksgiving weekend. 

3 Thanksgiving marketing strategies to Help you sell more

1) Have an attitude of gratitude 

Retail sale

Thanksgiving is the ideal occasion to express your gratitude to shoppers. At the same time, it’s an opportunity to excite them with upcoming Thanksgiving promotions and discounts. 

So thank loyal customers for their business by offering them something in return – in the form of special deals, coupons, or gifts! The following is a list of possible promotions you can run during the weekend: 

A Free Gift with Every Purchase: This promotion type encourages shoppers to make a purchase by offering more value for the same price. In order to create a sense of urgency among customers, retailers should stress that the promotion is limited and exclusive. Meaning that the gift is only offered for a certain period of time and until stock runs out. For example, think about using the words “while supplies last” or “offer valid from October 6-14” on your promotional materials. 

Percentage Discount: This is the most straight-forward and popular promotion type. Seasonal discounts help attract new customers and get rid of slow moving or seasonal stock. 

Buy One, Get One Free: Studies show that offering shoppers something for free is oftentimes more effective than a discount. You can pair high-margin items with slow moving stock. Or, you can increase the amount of items required in the promotion. For example, “Buy 3, Get 1 Free”.  The Body Shop is a retailer that frequently and effectively employs this promotion strategy. 

Offer treats to show your appreciation: You could offer some Thanksgiving treats in-store to your customers. Things like cookies or pumpkin pie slices are a quick and easy option to show your customers you are thankful for their support. Besides a delicious treat, customers will associate the wholesome feeling of gratitude with your store.

Thanksgiving marketing idea: offer thanksgiving cookies
A cute and quirky Thanksgiving cookie, recipe here

Gratitude in your messaging too

The attitude for gratitude shouldn’t end at your sales strategies. Practice gratitude in the messaging throughout your store and to your customers. Making sure your loyal customers understand your gratefulness towards them is an amazing way to make these customers feel special. Use sentences that express thankfulness throughout your store and adverts. Sentences like the following:

  • Thank you for supporting us!/ Thanks for your support! (this one is a great little message to add on your store receipts)
  • We love our (your brand name) family! Thank you for sticking with us!
  • We’re here because of you, thank you!

Once you’ve gotten your promotion strategy in place, make use of digital marketing tools to spread the word about your’s store Thanksgiving promotions. An email marketing campaign and social media are both effective tools that will help generate a buzz and increase foot traffic for your store. 

2) Thanksgiving email marketing

thanksgiving email marketing

Email marketing is a cost-effective way to reach shoppers and drive store sales. According to Hubspot, email generates $38 for every $1 spent

Listed below are best practices to follow for creating an email marketing campaign that converts subscribers to shoppers: 

  • Include an incentive in the subject line. Many business owners overlook the importance of email subject lines. If your email headline does not grab the attention of shoppers (even if it is drafted to perfection), it is unlikely that anyone will open it. By including an incentive in the subject line, you can improve your email open rate. An example of a compelling, incentive-driven subject line is,”35% Off Thanksgiving promotion starts tomorrow”. 
  • Get the timing right. Thanksgiving is a busy time for most shoppers. On top of that, most people are expecting a bombardment of holiday emails (Halloween, Black Friday, American Thanksgiving, Cyber-Monday etc.). That’s why retailers can expect lower than average open and click through rates in November. So it’s important to start your email marketing campaign at least a week prior to the Thanksgiving weekend. Earlier in the week is also proven to be better for email campaigns – with Monday having the highest open rate
  • Personalize the email. You can do so by including the shopper’s first name in the email or subject line. Personalized subject lines are 26% more likely to be opened

3) Give back to your community

thanksgiving marketing through charity

There are many ways to give back to the community this Thanksgiving season. 

One way is to partner up with a local food bank by holding a canned food drive at your physical storefront. Not only does this showcase your store’s community support, it also helps drive foot traffic to your store. Create incentives for shoppers to donate by giving a % discount to every shopper who drops by your retail business with canned food. 

You don’t necessarily have to partner up with a food bank either. Think about teaming up with a local organization that is related to your business. For example: 

  • A pet food store could partner with an animal shelter. 
  • A women’s clothing store could team up with a domestic violence shelter in the area. 
  • Health food stores could work with local homeless shelters.  

Supporting a cause that both you and your shoppers believe in will help you build brand awareness and create new marketing opportunities for your retail business. 

Bonus tip: use Thanksgiving hashtags

Make sure you are using relevant hashtags in all your digital communications! This allows you to reach more people who are looking for Thanksgiving related stuff. The following hashtags are great for the holiday:

#Thanksgiving2022
#Thanksgiving
#Thankful
#ThanksgivingWeekend
#Gratitude
#Thankfulness
#TurkeyDay

Get Ready For Halloween and Black Friday

Remember, Thanksgiving sets the stage for Halloween and Black Friday – two of the biggest shopping days of the year. So it’s a great opportunity to generate a buzz and get shoppers excited for upcoming promotions and deals! 


Did you find this article helpful? We will be posting more holiday marketing tips in the upcoming weeks. Subscribe to our blog to stay updated!  

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4 Ways QR Codes Can Help Retailers

4 Ways QR Codes Can Help Retailers

Invented in 1994, the QR code was originally made so that Toyota could track car parts in their manufacturing process. 28 years later, QR codes have become so much more. In particular, the COVID pandemic helped popularize the use of QR codes in businesses everywhere. Whether you’ve seen it being used by shoppers adding social media accounts or to view a digital menu, it’s an increasingly common tool that retailers can use to speed up service and improve customer experience. Here are 4 different ways QR codes can help retailers.

1. Attract more shoppers to your website

Drive more website traffic with QR codes
(Source)

QR codes can look like a complicated barcode but they are actually an image of information. For example, you can store everything from phone numbers and documents to website addresses. But sharing websites and social media accounts is definitely the most common use for QR codes. By adding a QR code to any marketing materials or signage, you are giving shoppers the fastest way for them to access your website or social media accounts. Instead of typing addresses or searching for accounts, shoppers can simply scan the QR code with the camera on their phones and access your information in 1-click.

Expert Tip!

QR codes do not need to be limited to physical materials. QR codes can also be placed on things such as email signatures, profile pictures, and social media covers.

By making it easier for shoppers to get access to your online storefront and social feeds, you will attract more shoppers to your business. After all, being found online or having an online storefront will not only increase your online sales, it helps drive foot traffic back to your physical store as shoppers have an easy way to stay up-to-date on new product launches, special offers, etc.

2. Sell from your shopfront window

Barber shop using a QR code on its storefront window
(Source)

Another way QR codes help retailers sell is to make it easier for stores to sell things from their physical shopfront window. For example, adding QR codes next to products that are displayed in your shopfront window that link to each specific product in your online catalog. This gives shoppers an easy way to scan a product to find out more or even buy online, even when your store is closed. Doing this makes your storefront window more engaging and informative – both of which are important for good customer experience.

3. Get more social media followers

Gain new followers with QR codes
(Source)

Many retailers today use QR codes to make it easier for shoppers to follow their social media accounts. Since QR codes are scanned as website links, shoppers can easily open your social media accounts with 1 click. Making it easier for people to find your accounts will increase the likelihood that they will follow you. Place these QR codes anywhere customers and business partners can see them (email signatures, profile pictures, in-store signs, counter stickers, etc.).

4. Give fast access to free WiFi

Give fast access to free WiFi with QR codes
(Source)

One of the best uses of QR codes is to give shoppers 1-click access to guest WiFi in the store. You can create a QR code that store visitors can scan to be automatically connected to your guest WiFi. This is a special type of QR code that automatically enters the network name and password into an iPhone or Android mobile phone. Shoppers love it as it means no more entering network names or long passwords. It is also better for your network security as you don’t need to disclosing the actual password.

If you want to encourage shoppers to browse, offering free guest WiFi is a great way to get shoppers to stay for a longer time in your store. It doesn’t cost you anything and it’s been shown that shoppers that stay longer in a store buy more things and spend more money.

Scroll down to learn how to create your own WiFi QR code.

How to create QR codes

QR codes are very simple to create. All you need is online QR code generator to make them. When using these platforms, creating your QR code is as simple as pasting the website address you would like customers to open. Then press the generate button, and congratulations you will have just made your first QR code!

A. Standard QR codes

Standard QR codes for retail
Creating a QR code on QR Code Monkey

For standard QR codes, we have two recommendations: QR Code Monkey and QR Code Generator. QR Code Monkey is a great free option. QR Code Generator offers a few more features and even has a premium membership. Both of these tools let you add colors and even a logo to your QR code.

B. WiFi QR codes

WiFi QR codes for retail

The main difference when creating QR codes for WiFi sharing is that the code generator needs to support WiFi information. A good tool for this is QiFi.org which was built specifically for this.

All you need to do is enter the SSID (network name) and password for your guest WiFi network. You may also need to enter the Encryption type, so check your Wi-Fi settings if you don’t already know this. Once all of the information is entered, click Generate to produce the code.

Expert Tips!

1. For better security, always create a separate guest WiFi from your main WiFi network so that you have separate password access.

2. For better security, always make sure that you hide the password so that it cannot be seen in the user’s phone. With QiFi.org, fill the Hidden checkbox before clicking Generate.

3. Always test your QR code on your mobile phone before printing any marketing materials or sharing it to make sure it is working properly!

Now you know some ways QR codes can help retailers. Time to start implementing this popular technology to your business. You can follow one of the tactics we mentioned, or get creative and try your own tactic. If you end up coming up with your own QR tactic, please feel free to share it below in the comments!

Google SWIS integration for Online Catalogs