It is hard to resist the temptation to be all things to all customers. More than once I have seen retailers try to add luxury items to their stores built on value-priced merchandise. This strategy rarely works: the high-end shoppers will not step foot into a store whose reputation has been built by offering cheaper products and the loyal clientele can rarely afford the more expensive merchandise, and may even feel alienated.

The solution is usually to open a new chain of stores entirely with a different brand that is in not associated with the old brand. This way each chain has a clear strategic focus. This story about Samsonite opening a new chain of high-end luggage boutiques under a different brand (Point A) illustrates the point:

At Point A, Samsonite will for the first time market its products alongside such tony brands as Andiamo, Hugo Bosca and Kenneth Cole.

Shoppers from various budget brackets can spend $12.95 on a Samsonite seven-day pill case or splurge on a $550 Zero Halliburton aluminum-encased, leather-lined briefcase. This is not the place to find non-designer, discount items, Zucker said.

"There's nothing in this store that you would find in a Target, Wal-Mart or Kohl's," Zucker said.

Why we shop. This article profiles a home-based private retailer. The idea has been around for a long time: customers (usually women) are invited to the saleswoman's home where they spend time one-on-one looking through the latest offering of clothes and accessories. If they like something, they place an order.

The appeal is obvious. For one thing, there is the air of exclusivity, since sales visits are by appointment only. And then, of course, there is nothing like being the center of attention:

Notes Swartz, "If it doesn't look good, we say, `We can do better.'" That's much less ego-deflating than, "Oh my, that just makes your butt look big." Or dead silence from a sales clerk who doesn't care if your butt looks big and simply wants to ring up a sale.

"Also, because we know our customers, we know if someone has bought a certain item and we can tell them not to buy it," says Shulman. That way customers won't see each other wearing the same article of clothing at a social function. The horror.

The best salespeople in apparel sell you a pair of pants, a shirt, a belt and a pair of shoes when all you wanted in the first place was a pair of pants. The intimate setting is perfect for this kind of upselling:

"We also do wardrobing. Here, you don't just buy a skirt and bring it home to your closet and see what it matches. You can do that, but what we really do is work with people making the most use of the clothing.... They can purchase eight pieces of clothing and come up with 20 outfits they can wear...Also, everything is in one room so it doesn't take long to build a wardrobe."

What surprises me is that more retailers do not offer this kind of service in their stores. Here's an idea, why not pick your slowest sales day (a Sunday or Monday, for example) and make the store open by invitation only. Invite your best customers and pamper them with one-on-one shopping.

Our society today is so affluent, people rarely shop because they need to. People shop because they want to. We shop to fulfill deep psychological needs. We shop because we are bored. Or because we are lonely or depressed. Or because we are seeking validation. The smart retailer understands that she is not just selling merchandise, she if fulfilling a profound social craving in each of her customers.

Sales can be a narcotic. When customer traffic to your store slows down, it is always tempting to reach for the red marker and start making sales signs. This is what some of the big consumer electornics retailers have been doing to get shoppers into their stores, according to this report:

Circuit City for example, is offering no-interest financing for 12 months on all TVs that cost more than $299. And at Best Buy consumers using a Best Buy credit card don't have to pay interest on any purchase until January 2004. The consumer electronics chains are not alone, either. Sears is currently offering zero percent financing and no payments until July 2003 on its Kenmore brand of washers, dryers and refrigerators.

However this can be a dangerous strategy over the long term since you run the risk of conditioning your customers to expect big sales every time they go into your store.

"You always have to be concerned about promotions. Sales may materialize but profits may not," says Todd Kuhrt, a retail sector analyst with Midwest Research...

Another problem with these favorable financing deals is that consumers might not be as willing to spend on big-ticket items once the incentives are gone. This could hurt future sales. Ulysses Yannas, an analyst with Buckman, Buckman & Reid, a New York based brokerage firm that does not do investment banking, says that consumers are becoming increasingly savvy and are willing to hold out for deals...

Faced with that dilemma, retailers might have to extend the deals, which would continue to put pressure on profits. That's exactly what has happened with the big automakers.

Wal-Mart dealt with this problem along time ago with its "Every Day Low Prices" strategy. Wal-Mart never runs a sale so customers do not wait for a special before they go shopping. Customers know that the price they see today will still be there tomorrow, so there's no point in holding out. Other big retailers like Home Depot have adopted similar strategies.

Of course if you are a small retailer (and next to Wal-Mart, who isn't?) then offering rock-bottom prices every day is a sure way to be in bankruptcy court by year's end. But if only retailers spent half the energy they spend creating promotions and thinking up sales on ways to get customers to want to spend more money, not less. Why not invite your top 30 best customers for an exclusive wine tasting and unveiling of your new spring line of clothing?

Tip of the day. Ever wonder what goes on in your stores when you're not around? Human nature dictates that your employees do not act the same way when you are in front of them than they do when left alone. But what exactly are they doing? Best way to find out is to have a friend or relative visit your store when you are not around and pose as a customer. This will give them an idea of how well customers are taken care of and what the general mood in the store is when the boss is not around. They can also try calling your store to see how a customer is treated over the phone.