Does Discounting Sell Value?

  

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Question: Should discounting be a key strategy during the holidays?

Discounting is to retail as breathing is to life… Doesn’t that seem to be the case these days? I think the only retail space where customers don’t ask for a discount is the grocery store. Retailers have taught the buying public not only to expect, but also to demand a discount. No one wants to pay ‘retail’. In fact, customers don’t even believe there is such a thing as ‘retail’. I imagine the definition of Suggested Retail Price as: “an artificially inflated number that can be used to discount against to generate a sense of implied savings.”

So, we know what the media, and big box retail have taught the people who are shopping in your store – expect or demand a discount. The more important question is: what have you taught your customers? Do your customers expect or demand a discount? Or, do they expect or demand quality products at a fair price accompanied by good customer service?

The point is, you should not deviate from your normal selling strategy during the holiday season. If you sell on price alone, then you’d better have the lowest prices. It’s hard to survive when you discount on already low prices. Unless you have the deep pockets to buy at phenomenally low costs, good luck with this strategy.

But, if you sell on value – then a well thought out discount event – which means specific and time limited - can generate additional sales. It should reward your good customers and entice new ones to come into your store. What it should not do is set an expectation that this will be a regular occurrence. If it does, then you will become just like every other retail junkie that cannot get by without a discount fix. Discount if you will – but only in moderation.