Gift Focus inc Attire Accessories - Page number 158 - September/October 2021

158 As the festive season draws nearer, Louise Prance, Gift Focus Editor, looks at the pros and cons of the preceding discounting periods W ith the high street recently opening up in the UK, and, at the time of writing, all restrictions having lifted, retailers big and small can look forward to a prosperous Christmas. And with the 2020 festive season seeing stores shuttered in the lucrative two day run up to the big day, it’ll be a welcome sales period for those that suffered losses throughout the last 18 months. However, ahead of the lucrative Christmas shopping onslaught comes the discounting periods of Cyber Thursday and Black Friday. Love them or hate them, it seems that the UK has firmly adopted this U.S.-born tradition, with both bricks and mortar and online retailers increasingly slashing prices to compete with behemoths such as Amazon. However, is discounting for you? The pitfalls are not to be overlooked. Heavy discounting can dilute the premium nature of the product, and store. If you are an independent boutique that prides itself on exclusive and high craft products, it may be worth thinking twice about a heavy drop in prices and instead opting for a store-wide 10 per cent discount, for example. Likewise, ongoing discounting periods can lead to customers viewing your products as over priced during non-sale times, while encouraging them to wait to purchase during your discount runs. However, while there are certainly cons, discounting done correctly can work well for retailers, especially following a year of uncertainty and store closures, with much needed revenue a priority. Done right, price drops encourage footfall in store, boost short-term sales, and are a good way to get rid of unsold stock. If offering discounts worries you due to the aforementioned reasons, then offering discount codes or VIP offers is a way to entice custom, while maintaining a level of exclusivity. Discount codes and VIP incentives also invite repeat custom, which is the golden ticket for every retailer looking to bolster sales on an ongoing basis. Strategic discounting can also be a good way to encourage a purchase of a high-ticket item. Furniture and homeware, for example, can often create brand loyalty with adhoc discounting periods. The rise of online shopping during lockdown measures brings with it its own problems for independent retailers, and staying abreast of the competitive prices e-commerce brings is not to be overlooked. Market analysts Oliver Wyman wrote, “Effective data-driven merchandising calls for more conscientious management of all the available levers of the customer value proposition: customer-relevant shelf-pricing, personalised marketing and optimised promotions. Promoting smarter amid the pandemic is a foundational capability that can fund investment across levers for long term growth.” Whether discounting is for you or not, it’s something to weigh up based on your own individual situation. Get the formula right, and it could bolster sales, get it wrong, and you could risk devaluing your offering. CONSUMER INSIGHTS