January 2020

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The purpose of this blog is to provide a reliable source of business, tax, and accounting information. English is chosen language to ensure coverage for Danish and non-Danish readers. 

Sales the Danish way

January, 2020.

We are in the middle of the winter sale season. It is a good time for the consumers to stock their wardrobes and a good opportunity for the retailers to cash in and get rid of stocks. How do you manage sales like a local? You need to know how to run sales the Danish way.

Price is one of the 4 P’s in the marketing mix theory: price, product, promotion, and place (E. Jerome McCarthy, 1960). Sale is the time when you lower your price not only to boost your revenue, but also to attract new customers into the shop. Sale season makes it possible for the customers to acquire products that otherwise will be out of their budget, e.g. luxury items, high-end products, or something nice-to-have. As a retailer, if you use sale wisely, you can achieve much more than just increasing your revenue.

Traditional sale seasons in Denmark
Traditionally, there are two sale seasons: the winter sales starts in the last week of December to the end of January and the summer sales begins at the end of June, around Sankt Hans, and the whole month of July. Larger shopping stores like Magasin and Illum have two extra midseason sales in spring and autumn.

The traditional sale season is the time for consumers to restock what they need or desire, but cannot pay full price for. If you have a retailing business and you don’t offer sale at this time, then it is likely your shop will stick out among your competitors. Some companies may misuse the perception by faking sales: raising the price and selling at the original price, labelled as the discounted price. The Danish commercial law allows retailers the freedom of setting prices; it forbids fake sales.

New sale events
Danish retailers are quick to acquire new sale events, for example: Black Friday, Single Day, and Cyber Monday. Black Friday has grown so much in popularity that now it became a mainstream sale season. In 2019, even supermarkets had Black Friday campaigns.

Sale is the time when the retailer lowers price for cash. If you are too desperate, you may harm the business in long term. The retail industry has already experienced a fall in visitor numbers in December sales due to Black Friday.  If you run sales too often, then the customers would get used to the discounted prices and will not turn back until the next sale.

Out-of-season sales

Usually, super markets run advertising for the birthday sale, or local shops celebrate anniversary of a number of year in business. Danes often joke about businesses that celebrate several birthdays annually. Sometimes, retailers have clearance sale (lagerudsalg), but you are never sure because they have too much stocks, or because they are dried out of cash. The occasion can be true or not, but the purpose is the same: to cash in.

Sales also send a signal to your customers, your business partners, and your competitors about the state of your business. I feel a little pain in my heart whenever I see an “Alt skal væk” sign. It is the Danish version of shop closing sale. When you see it, you know that someone’s dream gets broken; the owner gives up and the business is now bleeding to death. If you visit one locally, all you can do is to buy what you can and say good luck and best wishes to the owner.