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Trade-in coupons increase sales at department stores

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Although it was still early in the afternoon on a weekday, many customers carrying paper bags were seen going into Odakyu department store. A woman in her 60s commented, “It’s great that I can get rid of these old shoes – they’re not something you can give away like clothes. I brought three pairs of men’s shoes to trade in today and I’m going to buy new ones with the coupons.”

The “trade-in campaign” at Odakyu department store is drawing attention, and is being offered at its three locations in Shinjuku, Machida and Fujisawa.

The first such sales promotion was held April 8-21. Customers were allowed to bring in one pair of women’s shoes for which they received a coupon worth 1,050 yen that could be used in purchasing new shoes at Odakyu department store. The department store explained that it initially expected to issue about 20,000 coupons but ended up giving out more than 150,000 coupons. Sales at its Shinjuku outlet’s women’s shoes section doubled compared to that of the previous year during the same time.

Following the success of the first trade-in campaign, Odakyu decided on a second promotion starting from April 22 and lasting until May 6 – this time, broadening the product the customers could bring for trade-in to include men’s shoes, women’s handbags and sports shoes, albeit with some restrictions such as a maximum of five items per person, coupon redemption expiration dates, and coupon usage limited to products over 8,400 yen.

Competitors Seibu and Sogo decided to follow suit, with their own trade-in promotion for women’s shoes and handbags from May 1-6. Leading supermarket Daiei also had a special trade-in sale, focusing only on clothes, in mid-April. A common business strategy among electrical appliance stores, other types of retail stores are now adopting the “trade-in” sale as well.

Do the department stores actually profit by accepting worn-out shoes in exchange for a 1,050 yen coupon?

According to a source in the distribution industry, in the case of Odakyu department store, the secret lies in the fact that the coupon can only be used to purchase products priced over 8,400 yen, and only one coupon can be used per item. In department stores, shoes and bags can still yield profits even at a discount of 20% to 30%. One coupon used to purchase a product costing over 8,400 yen is the same as a 12.5% discount, which means that the department store can still make a profit from the sales, so no losses are incurred. Further, as these coupons must be used at the department stores that issue them, the number of coupons given out indicates the number of sales to be expected during the promotional period.

A business journalist explains, “If the coupon can be used at any time during the promotion, not only does this increase the number of repeat customers but also may boost sales of other products sold in the store.”

The trade-in is a win-win strategy for both the buyer as well as the selling side – so long as consumers don’t end up using the coupons to buy what they don’t really need.

© Japan Today

©2020 GPlusMedia Inc.

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I hope they donate the collected clothes and shoes to a worthwhile charity.

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I would like to know too what they do with the collected clothes...

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