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LETS GET DOWN TO BUSINESS.

Question :
Do discounts and sales actually work? How often should I do them? I don’t want to devalue my brand.

Question submitted 19/06/20 @ 07:59am
Industry: Sales
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  • Like the country song says, ‘it really depends on the situation’ – you can have two views here, a sale is a sale or when you sell at a price that is below ‘normal’ the market will immediately discount the value and utility of your product.

    My own view – if the market gets to know that every month, in the last week of the month you will be coming around with sales, they will just wait for you to offer that discount.

    So don’t do that, unless that is a part of your success model.

    Hello, I am assuming you sell retail products and Andy’s comments are spot on. It has been proven endlessly that around 60% of the discounts supermarkets offer provide no benefit in gaining further transactions or incremental basket size as customers would buy these regardless. So it depends on what you are trying to achieve. Is value a core part of your brand message or are you just offering a discount to get you out of a short term sales slump? In NZ retail there is a portion of consumers who will only shop for the “bargains” and once they figure out your brand does this regularly they just wait for the next offer eg Katmandu, Briscoes, Air NZ. I view NZ as a niche market as we are only 5m people so to be successful you need make your brand as accessible as possible to the widest possible audience. Consider having a part of your range targeted at value orientated customers and other parts focussed on core and premium products so you can balance your GP at a sustainable level. If you choose your products well you will find “premium” customers will add an additional item to their basket just because its good value as well as building transactions across the board. I am happy to have a deeper conversation to support as i have extensive experience in this space. jwoodbridge@xtra.co.nz
    All the best
    James

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