Ever wander through the aisles of Burlington and wonder how they manage to keep their prices so enticingly low?
Burlington offers goods at lower prices primarily because they use a buying strategy known as ‘off-price retailing’. They purchase overstock merchandise and out-of-season items from other retailers or manufacturers at a steep discount, which allows them to pass on these savings to their customers.
Stick with me as we unravel the magic behind Burlington’s pricing that keeps shoppers coming back for those budget-friendly finds.
A Closer Look at Burlington’s Business Model
Burlington, formerly known as Burlington Coat Factory, has undergone a transformation that has turned it into a retail force to be reckoned with. This transformation is deeply rooted in its unique business model which makes it distinct from other retailers. At the core of Burlington’s strategy is the deliberate effort to provide name-brand merchandise at significantly lower prices than its competitors, generally between 60-70% off other retailers’ prices.
The Evolution of Burlington from Coat Factory to Discount Powerhouse
Burlington began in 1972 as a wholesaler of ladies’ coats and outerwear, leveraging the off-price concept which allows them to sell high-quality merchandise at a fraction of the cost of department store prices. Over the years, Burlington expanded its inventory to include a full range of apparel, home decor, pet supplies, baby gear, and more. This diversification has made the company more resilient and able to attract a wider customer base looking for quality deals.
The company strategically chooses not to spend heavily on advertising, instead relying on the allure of its low-price offerings and word-of-mouth endorsements to drive traffic. By remaining focused on offering value to customers and expanding its product assortment, Burlington has seen significant growth, boasting more than 740 stores across the US and Puerto Rico as of 2021.
Volume Purchasing: The Economics of Bulk Buying
One of the keystones of Burlington’s business model is volume purchasing. The idea is simple: buy more, pay less. By purchasing merchandise in bulk, Burlington is able to negotiate lower prices from manufacturers, often buying overstock or out-of-season goods at a discount. These savings are then passed on to their customers. The economics of bulk buying are clear – the cost per unit decreases significantly when large quantities are purchased, allowing Burlington to undercut their retail competitors while still maintaining a profit margin.
Consider the following simplified example:
|Cost per Unit
In practice, Burlington’s bulk buying power means that it can offer merchandise at up to 65% lower than other retailers. As an off-price retailer, Burlington revamps its inventory frequently, capitalizing on the latest market trends and overproductions, often scooping up end-of-season items that traditional retailers need to clear out to make room for new stock.
Their inventory management is another area where Burlington excels, ensuring that the flow of goods aligns with consumer demand. This dynamic business strategy is at the heart of their ability to keep prices low. The retailer also saves on operational costs by displaying products in a ‘no-frills’ setup, foregoing the fancy displays seen in department stores, which translates into additional savings for customers.
By securing merchandise in this manner, Burlington caters to the cost-conscious shopper, offering a wide variety of items that are both affordable and of high quality. This strategic approach to purchasing and inventory management is a cornerstone of why Burlington is able to sell its merchandise at such competitive prices.
Supply Chain Maneuvers: Keeping Costs on the Down Low
Understanding how Burlington can offer merchandise at such heavily discounted prices involves peering behind the curtain at their clever supply chain strategies. The company has honed a set of business maneuvers allowing them to procure goods at a fraction of the normal cost, which they then pass on to consumers as savings.
Closeouts and Overstock: A Treasure Trove of Deals
One of the key tactics Burlington uses to source cheap merchandise is by focusing on closeouts and overstock from other retailers and manufacturers. Closeouts occur when a store is looking to get rid of its inventory quickly, often to make space for new stock. Overstock happens when products are produced in quantities larger than the market demands. In both situations, items can be obtained at substantially reduced prices.
Through this approach, Burlington is known to buy large volumes of items all at once, which gives them a significant bargaining advantage. By purchasing in bulk, they can negotiate prices down even further, scoring deals that are not accessible to regular buyers or smaller businesses. Here’s an illustrative example:
|Original Retail Price
|Burlington Purchase Price
|Burlington Retail Price
This table shows the potential savings Burlington can offer. They may buy a product with an original retail price tag of $50.00 at a closeout or overstock price of $15.00, then turn around and sell it for $25.00—a significant discount for customers seeking a bargain.
Out-of-Season Inventory: Timing the Market for Bargains
Another strategic move in Burlington’s supply chain playbook is the acquisition of out-of-season inventory. This involves buying goods that are no longer in peak demand due to seasonal shifts, which can lead to considerably lower prices for the retailer. For example, winter coats are often less desirable during the summer months, meaning manufacturers may sell them at a lower cost to clear their inventory. Burlington capitalizes on this by buying these items during off-peak times and hoarding them until the next season approaches.
The advantage this gives them is two-fold. Not only do they get the merchandise at a reduced rate, but they also cater to bargain hunters who are willing to buy slightly out-of-season or last season’s goods if the price is right. Shoppers know that they can find past season trends at Burlington for a fraction of what they would pay for current season designs elsewhere. In essence, Burlington’s timing allows them to treat the fashion cycle as a cyclical market in which they specialize in the acquisition and resale of “fashion futures.”
Here’s a quick list of the benefits that Burlington gains from such inventory purchases:
- Lower purchase costs due to reduced demand
- Increase in bargaining power by buying in significant quantities
- Ability to provide customers with highly discounted prices
Burlington’s stringent selection process and strategic purchasing windows are both essential in maintaining their low-price business model. By exploiting market timing and inventories surplus to requirement, they create a win-win: manufacturers offload excess stock, and shoppers enjoy luxury items at bargain basement prices.
The Role of Store Layout and Presentation
The budget-friendly price tags at Burlington can partially be attributed to their unique store layout and presentation. Unlike high-end retailers that invest heavily in store aesthetics, Burlington opts for a no-frills shopping experience. This means that instead of fancy displays and polished floors, you will find a more warehouse-like environment with simple rack and shelf arrangements. This minimalistic approach not only reduces overhead costs associated with décor and sophisticated store designs but also enables Burlington to pass on the savings to customers through lower prices.
No-Frills Shopping Experience: Savings over Aesthetics
Burlington stores are designed to be functional rather than attractive. The focus is on providing a wide selection of goods at low prices rather than creating an immersive shopping experience. This austere approach to their store layout means that there is minimal spend on interior design, elaborate fixtures, or in-store technology, which translates into lower operating costs. These savings are then reflected in the pricing of their merchandise, greatly contributing to their ability to sell products at a significant discount.
Inventory Turnover: The Fast Fashion Effect
Another significant factor in Burlington’s low pricing strategy is their inventory turnover, which resembles the fast fashion model. Fast fashion retailers like Zara and H&M are known for quickly moving inventory from design to the sales floor, keeping their offerings fresh and exciting. Similarly, Burlington aims to constantly refresh its inventory, thereby encouraging customers to make immediate purchases for fear of missing out on a deal.
This high turnover rate means that Burlington can buy stock in large volumes, often taking advantage of overstock, closeouts, or last season’s items from other retailers and manufacturers at discounted prices. Here’s an illustrative example of how inventory turnover can impact pricing:
|High Inventory Turnover
|Stock is sold and replaced frequently.
|– Lower holding costs
– Ability to buy in bulk at lower prices
– Less risk of obsolescence
|Low Inventory Turnover
|Stock is sold and replaced less frequently.
|– Higher holding costs
– Reduced ability to capitalize on bulk discounts
– Higher risk of item devaluation
The benefits of high inventory turnover for Burlington are clear: it keeps costs down and ensures that there is always something new to entice shoppers, all while maintaining low price points. Remember, in retail, time is literally money; the faster a store can convert its inventory into sales, the more financially efficient and competitive it becomes.
By focusing on a no-frills shopping experience and maintaining a high inventory turnover, Burlington is able to provide customers with significant savings. While lacking some of the comforts and visual appeal of more curated retail spaces, the economic benefits of such strategies are a key to Burlington’s ability to sell merchandise at such competitive prices.
Marketing Strategies That Cut to the Chase
One of the key factors behind Burlington’s ability to offer products at such competitive prices lies in their marketing strategies. Unlike many of its competitors, Burlington adopts a more cost-effective and grassroots approach to creating brand awareness and customer loyalty.
Word-of-Mouth Buzz vs. Big Budget Campaigns
Burlington traditionally relies less on expensive advertising campaigns and more on word-of-mouth marketing. By not spending heavily on high-profile TV commercials or celebrity endorsements, they save significant amounts of money. These savings can then be passed on to customers through lower prices on merchandise. The chain focuses on delivering such great deals that customers are naturally inclined to share their finds with friends and family, thereby fueling the word-of-mouth buzz. This organic marketing approach helps to maintain a loyal customer base without the additional costs of big-budget advertising campaigns.
Limited Online Presence: A Focus on In-Store Savings
In today’s retail landscape, many companies are heavily investing in their online presence and digital marketing strategies. However, Burlington takes a different approach by maintaining a relatively limited online presence. This decision is intentionally made to concentrate resources on the brick-and-mortar stores. By not diverting funds into a complex e-commerce platform, Burlington can focus on providing in-store savings for their customers. The strategy allows for a lower expenditure on online operations and infrastructure, which in turn enables the company to offer deeper discounts on their in-store merchandise.
Moreover, by emphasizing the in-store experience, Burlington creates an environment where customers can engage directly with the products, something that can be lost in online shopping. The thrill of the “treasure hunt,” as customers browse through constantly changing inventory, adds value to the shopping experience and gives Burlington an edge in pricing.
It’s important to note that despite a smaller digital footprint, Burlington does not ignore the importance of the internet entirely. They cleverly utilize social media and targeted digital advertising to keep costs low while still engaging customers, but these efforts are more measured and cost-conscious compared to the investments made by other retailers.
In summary, Burlington’s strategic decision to focus on word-of-mouth promotion and a strong in-store experience, complemented by modest online and digital spending, allows the company to offer goods at substantial discounts. By cutting the frills of traditional retail marketing, Burlington successfully curates a shopping experience that combines fun, value and savings, which ultimately keeps their prices low and their customers happy.
Competitive Pricing: The Art of Undercutting the Competition
Burlington, formerly known as Burlington Coat Factory, has built a reputation for offering goods at prices that are often substantially lower than those of its competitors. To understand how Burlington achieves these competitive prices, it’s essential to look at their business strategies and how they stack up against other retailers in the industry.
Price Comparison: How Burlington Stacks Up Against Other Retailers
When looking at price comparison, Burlington often undercuts its competitors by a significant margin. While exact numbers can fluctuate based on the product, season, and region, customers typically find discounts ranging from 20% to 60% off what they would pay at traditional department stores. This is made possible by Burlington’s strategic purchasing and inventory management, which includes buying overstock items and past season goods from high-end retailers and manufacturers at a fraction of the cost.
For example, a customer might find a designer jacket at Burlington for $89.99, nearly half of its original retail price of $180 at a traditional department store. These types of savings are typical at Burlington and draw in cost-conscious shoppers who are looking for brand names at lower prices.
The Private Labels Influence: Exclusive Brands at Unbeatable Prices
Burlington’s approach to private labels—their own exclusive brands—also plays a pivotal role in their ability to offer low prices. By developing and promoting their own brands, Burlington can bypass the middleman and avoid paying the premium that comes with stocking well-known national brands. This strategy not only reduces costs but also gives them the flexibility to set more aggressive prices for their merchandise.
The impact of private labels on pricing can be best understood with a simple comparison:
|Private Label Price
|National Brand Equivalent Price
|Men’s Button-up Shirt
These private labels offer similar styles and quality to recognized brands but make fashion more accessible and affordable to a broader range of customers. For many shoppers, the slight differences between brand names and private labels are negligible when weighed against the substantial savings.
Burlington’s strategy of competitive pricing, combined with their private label development, enables them to provide customers with excellent value for their money. By prioritizing cost-effectiveness in procurement and creating exclusive brands, the company continues to draw a significant consumer base looking for quality goods without the high price tags associated with traditional retailers.
Burlington’s Approach to Quality and Brand Selection
Burlington, formerly known as Burlington Coat Factory, is known for offering high-quality products at significantly discounted prices. A key part of Burlington’s strategy involves a meticulous approach to selecting brands and ensuring quality. Despite popular belief, the lower prices do not necessarily mean that the products are of inferior quality. Instead, Burlington takes advantage of a variety of market conditions to provide value to their customers.
Designer Brands at a Steal: How Do They Do It?
Burlington’s ability to offer designer brands at steep discounts is largely due to their closeout buying strategy. The retailer purchases merchandise from manufacturers and other retailers that have excess inventory, seasonal overstocks or returned items. By buying these products at a lowered cost, Burlington is able to pass the savings to their customers. Another factor is their no-frills shopping environment that reduces overhead costs, allowing them to focus on offering lower prices rather than extravagant store designs.
- Overstock Purchases: Burlington buys out-of-season and overstock items in bulk, which leads to significant discounts from the original wholesale prices.
- Negotiation Power: With more than 700 stores nationwide, Burlington has substantial leverage to negotiate better deals with suppliers.
- Vendor Relationships: Long-standing relationships with vendors allow Burlington to buy products at a lower cost.
Quality Control: Myths and Realities of Discount Retailing
The myths surrounding quality in discount retailing often stem from the misconception that reduced prices equate to lower quality. Nonetheless, Burlington dispels these myths through rigorous quality control processes. Much of the merchandise available at Burlington is the same as what you would find at other full-price department stores, but the key difference is in how the merchandise is sourced and priced.
Contrary to some beliefs, the reduced prices are not a reflection of the items being damaged or defective. Burlington employs quality control teams that inspect their merchandise to comply with standards before it hits the shelves. Additionally, the store doesn’t solely focus on closeouts. It also sells first-quality items direct from manufacturers, which are specially made for the discount market with the same brand names that consumers trust.
|Quality Control Measure
|Teams inspect items for any defects before they’re sold.
|Suppliers must meet Burlington’s quality standards.
|Many items are purpose-made for Burlington to sell at their low prices, ensuring quality.
By striking a balance between cost and quality through savvy purchasing strategies and a no-fuss retail environment, Burlington manages to provide high-value products without compromising on the standards their customers expect. This approach has not only allowed Burlington to thrive in the competitive retail market but also to continually attract cost-conscious shoppers who are not willing to sacrifice quality for price.
Consumer Behavior and the Love for Deals
Burlington, formerly known as Burlington Coat Factory, has built a reputation for providing quality merchandise at deeply discounted prices. One of the reasons why shoppers are drawn to stores like Burlington is due to consumer behavior and a love affair with finding great deals. In this section, we’ll dive into the psychology behind bargain hunting and how the thrill of the hunt plays into the shopping experience.
The Psychology Behind Bargain Hunting
Bargain hunting can be an exhilarating experience for many shoppers. The ability to find items at a low price brings a sense of accomplishment and smart shopping. But what drives this behavior? Neurologically speaking, scoring a deal triggers the release of dopamine, a neurotransmitter associated with pleasure and reward. This chemical response reinforces the behavior, encouraging shoppers to continue looking for great deals. Moreover, it’s not just the actual savings but also the perceived value that factors into the joy of bargain shopping. When consumers believe they’re getting more bang for their buck, their satisfaction with the purchase increases.
Research has also shown that consumers who perceive themselves as savvy deal finders tend to experience a boost in self-image. There’s a social aspect to this as well; sharing one’s finds with friends and family can lead to admiration and recognition, creating a social reward system for bargain hunting.
The Thrill of the Find: Shopping as a Treasure Hunt
Shopping at Burlington is often compared to a treasure hunt. This is because, unlike traditional retailers that may have multiple items in every size and color, off-price retailers like Burlington buy overstock, end-of-season, and closeout merchandise, which means their inventory is often unique and limited. This variability adds an element of excitement and urgency to the shopping trip—consumers know that if they find something they like, they need to buy it then and there, as it may not be available the next time they visit.
This treasure hunt experience can be deeply satisfying; it transforms shopping from a routine task into an adventure. The unpredictability of what they might find upon each visit keeps customers coming back. The satisfaction of discovering a hidden gem at a low price can be more thrilling than knowing exactly what you’re going to find at a traditional store where inventory is consistent and predictable. Shoppers delight in the unexpected and the opportunity to uncover items they might not have realized they wanted or needed until they found them at a bargain price at Burlington.
In conclusion, Burlington’s low pricing in tandem with the unpredictability of what’s in stock ingeniously taps into the psychology of shopping by providing consumers with a potentially dopamine-fueled pleasure of scavenging. This, in part, explains why Burlington has become a destination for those who love finding deals and enjoying the adventure that comes with a less conventional shopping experience.
Impact of Turning Over Inventory on Customer Savings
Did you ever wonder how Burlington can sell products for such impressively low prices? A major part of their strategy involves briskly turning over their inventory. Burlington, much like other off-price retailers, operates on the principle of keeping their stock fresh and dynamic. This means they continuously acquire new merchandise and avoid sitting on any one item for too long. The pace at which Burlington cycles through products allows them to keep their costs down and, in turn, pass those savings onto the customer. You might not see the same item twice on your visits, and that’s by design!
Sell It or Mark It Down: Burlington’s Inventory Refresh Strategy
To maintain their inventory turnover, Burlington employs an aggressive approach: sell it or mark it down. Items that linger too long on the shelves are promptly reduced in price. This ensures that the inventory doesn’t become stagnant, keeping the shopping experience fresh and enticing for customers. Not only does this strategy help Burlington clear shelf space for new incoming products, but it also offers amazing deals for shoppers who are quick to spot these markdowns. This method often results in discounts that go well beyond the initial bargain prices, adding an additional layer of savings for customers.
The Clearance Aisle Phenomenon: Last-Stop Discounts
The clearance section in Burlington is a prime example of their discount strategy in action. It’s here that items receive their final markdowns before they are removed from the inventory. These ‘last-stop’ deals can be particularly spectacular, with price reductions significantly lower than the original Burlington price, which is already a discount from the manufacturer’s suggested retail price (MSRP). Let’s break down what this might look like:
- Original MSRP: $50
- Burlington Original Price: $30 (40% off MSRP)
- Clearance Price: $15 (50% off Burlington’s price, 70% off MSRP)
Shoppers who frequent the clearance aisles have the opportunity to take advantage of these steep discounts, potentially taking home goods for a fraction of their suggested retail value. It’s important to note that while these deals are exceptional, they represent the end-of-line for these products at Burlington – it’s now or never for customers to grab these last-chance items.
The rapid inventory turnover and the ensuing deep discounts are part of why Burlington can offer such competitive pricing. This business model has been refined to benefit both the retailer, by keeping their stock new and interesting, and the customer, by consistently providing opportunities to save big.