How can I effectively discount without cheapening my brand?
In a recession-led environment, discounting is the norm on the high street. However, with a clear strategy in mind, retailers can give consumers what they want without running the risk of devaluing their brand.
Deborah Owen-Ellis Clark, retail marketing strategist for London Designer Outlet, which is due to open at the end of the year, says: “With a careful discounting strategy, retailers can position themselves as giving customers access to their brand at a lower price point without compromising on brand reputation.”
In the short-term, discounting can be a highly effective way of driving volume sales. When looking to the long-term, however, retailers need to consider how bargain-basement prices and red stickers could have the potential to permanently impact the consumer’s perspective of true value.
Owen-Ellis Clark says: “Those that do it well - and there are now many - consider it another strong retail channel for the brand, much like online, rather than a way to shift excess stock.”
One retailer getting outlet shopping right is Nike, she adds. The sporting goods brand has fully integrated outlet retailing into its business model with its Factory Store concept, which receives the same level of planning,
attention and management as the rest of the business.
Customers get the full Nike brand experience at a Nike Factory Store. Owen-Ellis Clark adds: “All too often, however, I still see examples of brands that are simply jumping on the outlet bandwagon to shift stock and are offering the brand service as an afterthought, with stock haphazardly bundled on the shopfloor and inattentive store staff.”
She says brands also need to carefully consider where and how their products will appear at a discounted price.