Whilst price reductions might amplify sales figures in the short-term, they can also cut your brand equity in half. The Industry looks at how thinking outside the box can give sales a more sustained boost.
It's that time of year again – red and white banners are littering high streets nationwide indicating that summer sales are in full swing; and this year earlier than ever before. With adverse weather conditions affecting trading, a reported 73% of stores launched special offers last week in a bid to clear their early spring stock for later summer drops – a worryingly 40% more than three years ago.
Discounting has become a big business in the changing retail landscape. With retailers finding it increasingly difficult to meet sales targets, figures suggest that companies have been implementing more and more promotions in the hope of quickly pushing revenue up. However whilst price reductions might cause pound signs to flicker in the eyes of the consumer, they often don't promote the long-term relationship that brands are looking for.
The trick is either to build a price slash into your business model from the outset, or offer more creative kinds of promotion; especially if that product retails at a luxury price point. For example, online competitions can bring attention to a particular product without giving the allusion that it is out of favour, or a well-planned loyalty scheme is far more likely to strengthen brand image than heavy discounting. And not only does this retain customer loyalty, it provides your business with insight into consumer purchasing habits too.
By The Industry's Features Editor, Harriet Bowe
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