Archive for October, 2008

Discounting - The effect on consumer behaviour and their brand perception of the retailer

Thursday, October 2nd, 2008

Whilst on the face of it, high levels of discounting and promotional activity may appear attractive to consumers in the form of lower prices, the RTT believes that widespread use of it can create risks for retailers. First and foremost, it believes that erosion of a retailer’s brand is one of the biggest risks faced.
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Discounting - The Changing Landscape

Thursday, October 2nd, 2008

For the purposes of the white paper, the RTT considered a broad definition of the topic area including:

• Sales, including clearance, end of year and mid season,
• Special or seasonal discounts or markdowns,
• Promotions, such as buy one, get one free, two-for-ones, on-line/e-mail vouchers etc.

Traditionally, ‘end of season’ sales were the way in which retailers disposed of surplus stock at regular, pre-determined times during the trading year; primarily in January and at the end of the summer. These sale times were well known by consumers as part of the shopping calendar and people understood that outside these regular sale times they would pay full price. It seemed to be a system that worked well for many years and suited both retailers and consumers.
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Tags: Advice, Discounting
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Discounting - The future

Thursday, October 2nd, 2008

The RTT believes that the current levels of discounting and promotions in today’s financial climate are untenable long-term; unsustainable; and unhealthy for the retail sector.

The situation, the RTT warns, is now one of a self-perpetuating, vicious cycle, where margins for the retail industry as a whole - as well as those of their suppliers - are being negatively impacted.
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Tags: Advice, Discounting
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