Debenhams’ refocused promotional strategy has paid off, leading to a 4.3% rise in profits. So how has the department store group changed its ways?

Debenhams has changed its promotional strategy

1. Run fewer promotions

“Promotions are part of what customers like about Debenhams, so it would be wrong to assume that we just want to do no promotions,” said Debenhams boss Michael Sharp on unveiling its half-year results today. “But driving more full-price sales has to be the right thing to do.”

So for the department store group it was more about reducing the number of Sales throughout the year. Sharp said customers had got so used to Debenhams having a Sale they would see a full-price item and wait a week or so for the item to be discounted. Now Debenhams holds fewer Sales events and customers are buying more full-price items as they are no longer certain there will be another Sale in a week or two.

“Customers had clocked onto the fact that when we’re on event they’re really good and drive really good value for money,” he said. “But now you can see fewer customers are saying they will just wait for the next event at Debenhams.”

2. Introduce more ‘light and shade’ to the calendar

A year ago customers were confused by what seemed like a never-ending period of promotions and Sales. But Sharp said as well as having fewer big events, the retailer has now introduced more “light and shade” into the promotional calendar.

“When we’re on promotion, we’re on promotion and when we’re not we’re not,” he said. “And customers have reacted very positively.”

Sharp said its internal brand tracker analysis has suggested customers think value for money is improving at Debenhams during non-promotional periods.

“I think there were too many promotions and as a result of that there was a lack of clarity,” he added. “One of the reasons customers think there is more value for money is because they can see when we are and aren’t on promotion.”

3. Improve customer service

By having less promotional activity in stores, Sharp said customer service has also improved.

“Staff can focus on service, customers and presentation as there is less workload focused around launching the next promotion,” he said.

4. Less promoted stock and shallower discounts

Additionally, when Debenhams is on promotion, Sharp said it is important for the retailer not be as heavy-handed with discounts and to include less product. For instance it will have fewer promotions on beauty, which already sells very well for Debenhams - the retailer currently has a 23% market share.

“Combination of right price, first price, so our everyday value is right, and when we’re on promotion let’s add really good value on top of that. But let’s have less stock and shallower discounts into the promotions,” he said.

5. Align the promotions to customer mindset

The retailer also planned its promotions more strategically, and in one case moved one of its key promotional periods to a week where more customers had cash to burn.

Sharp said: “We moved the Spring Spectacular by a week because it meant it coincided with the pay day at the end of February.”