Detrimental discounting?
Constant Sales and reductions make customers reluctant to pay full price, says Cristina Kehoe of Steilmann.

Cristina Kehoe, brand manager for Steilmann UK, talks to WWB about the negative impact of constant discounting.

I don’t know about you, but I am fed up with the desolate sight of the red “sale”, “30% discount” and “£££ off” signs that fill most department and high-street stores’ windows and aisles.

What was once a regulated promotional strategy that enabled retailers to sell end-of-line or slightly outdated stock has now become a shopping philosophy. Consumers have been pushed towards the perception that they must avoid buying an item at full price and hunt for bargains.

There is a discounting war taking place between retailers and shoppers, who are being bombarded with discounting opportunities in the press, on TV or through emails.

I can understand the psychology behind it; during these tough economic times, any indication that the retailer is offering the shopper money off an item triggers the reaction, “I must have it at this price!” Consumers are being turned into competitive shoppers, and yet there is one important element that has been forgotten – the understanding of “value for money”.

High-street retailers have spoilt the end consumer with gratuitous discounts, in many cases smacking of desperation. The irony is, in many cases, it hasn’t saved those retailers from bankruptcy. Regretfully, there have been examples of such retailers in our industry. Even more regretfully, this trend has spoilt the end consumer’s attitude towards shopping in independent stores.

Independents can’t work with the same high margins as high-street stores to enable them to still make a small profit, even by selling items at less than 50 per cent off the original price. Equally, they can’t survive if they are being dragged into this discounting war, as their financial resources and flexibility are a lot more limited.

As the quality of service seems to diminish in the same proportion as the discounts are increased, this should encourage independents to stay strong and fight their corner with their invaluable tool, which remains to be good-quality, friendly service.

Organisations such as the British Retail Consortium (BRC) need to take action to regulate sales’ times and limit the period of time that certain discounts are being advertised. Although this would be a relatively simple step to take and somewhat easy to put into practice, what would take a lot more effort and time to change is the shopper’s mentality.

As consumers, we are spoilt by such a wide choice of goods that we feel empowered to choose to shop only with those retailers that we believe are prepared to give us a “better” price.

But what we should be asking ourselves instead is, what is the “right” price?