ALBUQUERQUE, N.M. — Albuquerque specialty store Sports Systems was set to close last year after more than three decades in business because of fierce online competition, but owner Duane Kingsley says he’s now thriving thanks to a new retailer’s app he created.
The app, Best Deal Retailer, allows in-store salespeople to combine services and products into package deals for customers that beat low-priced goods on the Internet, enabling Sport Systems to retain a lot more customers without slicing profit margins. Kingsley says store profits are now at record levels because he’s selling at floor-marked prices rather than discounting goods to match the internet.
“Profits have been steadily declining in recent years from Internet competition,” Kingsley said. “I used to be happy with a 5 or 6 percent profit margin, but two years ago, it had fallen to 2 percent. With the new app, I’ve hit almost 14 percent profit on sales in the last year.”
Kingsley believes the app can boost all retailers’ ability to compete, so he’s launching a new business to market the system.
Best Deal Retailer will officially launch in a private ribbon cutting event on Thursday.
Family-owned Albuquerque business Shelton Jewelers is already using the app.
“Online jewelers have taken a lot of market share, so we see this is as a way to compete,” said marketing director Erica Shelton. “I’ve been able to retain walk-in customers with it.”
National sporting goods retailer Sun & Ski is also adopting it.
The system allows store personnel and customers to search the internet together on iPads to show price differences for store products compared with lowest available online costs. The store then builds a package of services into the sale that customers need to acquire anyway, making the store-bought value equal to, or better than, the internet price.
At Sports Systems, that could include free mounting of ski bindings, warranties, waxing and store loyalty-program discounts on future sales. For Shelton Jewelers, it could mean a free setting, appraisal and a year’s worth of insurance.
“We’ve always done free mounting, waxing and so forth, so we’re monetizing that in a package deal that saves customers more than on the internet,” Kingsley said. “The app is a visual tool to show all the value we offer.”
The system will soon include a barter program for retailers to swap services in package deals for customers, plus vendor discounts for retailers who use the app, potentially building the system into a “shop local” community resource.
“It’s not just an app, but a new type of sales and shopping process,” said Best Deal Retailer marketing director Dawn Goldman. “Kingsley isn’t a technology guy. He’s a retailer who created a technology solution for retailers.”