As pre-Christmas price slashing reaches new levels, Drapers looks at how retailers have approached discounting this year.
The spectre of discounting continued to haunt the high street in 2016. In April, multiples issued a stark warning about the “unsustainable” levels of discounting. Yet our Black Friday deals tracker showed a number were still opting for blanket discounts over targeted promotions, suggesting the message has failed to sink in. The latest research shows pre-Christmas price cuts have reached a record high.
2016 has also seen more and more retailers take a stand against heavy discounting. Jigsaw’s chief executive Peter Ruis has led the way on this in previous years and stuck to his guns in the run-up to this year’s Black Friday in November, labelling the event a “complete and utter deception”.
Fat Face boss Anthony Thompson also spoke out against discounting in August, writing in Drapers that it is a symptom of a wider problem facing high street fashion – its increasing homogeneity. It is hard to argue when you see so many party-goers wearing a knock-off of Self Portrait’s distinctive lace dresses, to give just one example.
Elsewhere, Ted Baker boss Ray Kelvin insisted the brand would not hold a full Sale in the UK before Christmas and Urban Outfitter’s Emma Wisden confessed that weaning the retailer off the “discounting drug” had been her biggest challenge as managing director. And while there were still plenty of deals to be had on Black Friday, many of the discounts were smaller and only on selected styles, rather than across the board.
But have we really reached a turning point on discounting? The high street is competitive and consumers can choose from hundreds of retailers (or opt to spend their cash on experiences instead). As a result, the discounting high ground can be a lonely place. Half of the respondents to Drapers’ survey on discounting said they thought it was damaging the high street but many said they felt compelled to cut prices to keep up with slashed prices from competitors.
2016 taught us some lessons – that people will buy at full price when the product is right, and that Black Friday is still an evolving beast. The battle against heavy discounting is not lost. Here’s to a more strategic, level-headed approach to price-cutting in 2017.