* ME+EM * &Sons Trading Co * Seven Berlin * 46 Stitch * House of Amitié
* GoodWork.ai * Anorak * Nix by Nicola Harding
The Discount Dilemma: Are Brands Digging Their Own Demise?
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This week during a trade conversation with a client, the d-word raised it’s ugly head (again) – DISCOUNT! Merchandisers and marketers can't seem to escape the relentless tug-of-war between the allure of discounts and the peril they pose to brand value, equity, and reputation. It's a tricky balance, and many brands find themselves caught in the middle, trying to meet customer/ business expectations without sacrificing their brand essence. The discounting treadmill is real; once you're on it, getting off can be a real challenge.
The Discount Downfall: A Cautionary Tale Remember what happened to Joules? Pre-pandemic, it was a retail star on the rise. However, supply issues, rising costs, and the dreaded cost-of-living crisis sent Joules into a tailspin. Discounts became the desperate remedy, but the more frequently they slashed prices, the deeper the damage to margins and brand reputation. Joules serves as a stark reminder of the risk of discount dependency. The future looks positive though as Tom Joule (who had taken a step back) has re-grabbed the reins as product director, bringing the focus back to re-establishing the brand values, identity & product handwriting (and moving the focus away from discounting).
The discount solutions: A Luxury Approach Luxury brands, typically immune to the discount fever, have felt the heat, having misjudged demand after the post-pandemic sales surges. It’s always been an unwritten rule that “true luxury never discounts”, so how have they offered discounts without compromising their image? One route was luxury outlet stores, with sales experiencing double digit growth in 2023, making it the one of the fastest growing channels.
Brands are redefining how they approach discounts and employing more creative solutions. No longer about flashy sales signs, they're embracing subtlety and innovation. Client events, personalized sales triggers, market places and outlets as well as exploring the resale market are becoming part of the new discount playbook. It's less about shouting discounts and more about creating an experience aligned with the brand's identity.
The discount dilemma isn't a black-and-white issue. It's a complex interplay between attracting customers, hitting financial targets and preserving brand sanctity. The question remains: Can brands escape the discounting treadmill and find a way to thrive without compromising their essence?
The Discount Downfall: A Cautionary Tale
Remember what happened to Joules? Pre-pandemic, it was a retail star on the rise. However, supply issues, rising costs, and the dreaded cost-of-living crisis sent Joules into a tailspin. Discounts became the desperate remedy, but the more frequently they slashed prices, the deeper the damage to margins and brand reputation. Joules serves as a stark reminder of the risk of discount dependency. The future looks positive though as Tom Joule (who had taken a step back) has re-grabbed the reins as product director, bringing the focus back to re-establishing the brand values, identity & product handwriting (and moving the focus away from discounting).
The discount solutions: A Luxury Approach
Luxury brands, typically immune to the discount fever, have felt the heat, having misjudged demand after the post-pandemic sales surges. It’s always been an unwritten rule that “true luxury never discounts”, so how have they offered discounts without compromising their image? One route was luxury outlet stores, with sales experiencing double digit growth in 2023, making it the one of the fastest growing channels.
Brands are redefining how they approach discounts and employing more creative solutions. No longer about flashy sales signs, they're embracing subtlety and innovation. Client events, personalized sales triggers, market places and outlets as well as exploring the resale market are becoming part of the new discount playbook. It's less about shouting discounts and more about creating an experience aligned with the brand's identity.
The discount dilemma isn't a black-and-white issue. It's a complex interplay between attracting customers, hitting financial targets and preserving brand sanctity. The question remains: Can brands escape the discounting treadmill and find a way to thrive without compromising their essence?