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Is right to discount?

Indies are up in arms over My-Wardrobe’s recent spring promotion - but is the etailer right to discount? Drapers Debates…

NO - Victoria Gallagher

Victoria Gallagher

Spring hasn’t even begun yet and retailers should certainly give their spring 13 product a chance to sell before slashing the prices. I know it’s tough out there at the moment and consumers are searching for bargains, but discounting does not only ruin the margins for the retailers doing it but it also affects stores stocking similar brands.

Indies I spoke to about My-Wardrobe discounting were hugely disappointed. With ecommerce such an integral part of retailing these days it is so easy for consumers to shop around and compare online. If My-Wardrobe is selling the same products as others at a discount then most shoppers will more often than not choose to shop at My-Wardrobe in order to save money, instead of buying the same product at their local indie.

Brands could also feel the pinch from this strategy as many too sell direct to consumer through their own websites and stores and this promotion could see their customers go elsewhere. Additionally brands could further miss out as indies opt to stock labels not featured in promotions and decide not to stock those similar to My-Wardrobe.

Discounting, particularly this early on in the season is, in my opinion, a dangerous path to go down and retailers should watch their step.

If retailers discount this early on in the season it devalues the products they are selling. If consumers think they can buy garments with money off then they will hold off on ever paying full price again.

YES - Catherine Neilan


Discounting is as old as retailing and My-Wardrobe is doing nothing particularly different to the hosts of other businesses out there.

Offering a temporary discount as part of a promotion is a canny move in a competitive market, and as David Worby told me last week, My-Wardrobe welcomes that competition.

Consumers are more price sensitive now than they have been for many years, which is a combination of both the economy and the changing way they can access information. While in the past, a shopper would have had to visit another town to see if they could get a better deal, now it’s a matter of a quick Google search on their phone or computer back home.

Even when the economy recovers, that genie is not going back in the bottle.

That’s not to belittle the concerns of those out there who are not in a position to discount – the independent retailers who cannot sacrifice their margins to tempt shoppers in.  It’s no surprise that things have come to an impasse whereby indies are seriously planning to drop brands who allow discounting of in-season stock to take place.

Julian Blades was right to write directly to Worby to share his concerns, but it is the brands that need to be brought into the conversation if indies want the discounting to stop.

Readers' comments (4)

  • I'm reluctantly with Catherine. Reluctantly because, while Victoria is right when she says discounting devalues the product, it's the perrogative of My-Wardrobe (read also Asos and Net in recent weeks doing their own flash sales/ promos if I recall correctly) to discount as they see fit. They have stock and if they want to take a hit on margins that's their call - it's cut-throat out there when prices are being slashed.

    Point of difference is key for indies so just stocking the usual brands that would see their portfolios significantly overlap with the bigger players just plays into their competitors' hands. Working harder to bring on board new exciting brands will reap rewards if the product is good and will side-step some of the discounting debates in the process.

    How early it is in the season is symptomatic of drop-creep where deliveries are getting earlier and earlier when the new season's weather, especially for the spring season, isn't tracking with it. As such, stock that's intended for the season we're barely in feels old as it's been in the shops for a while - in the relentless quest for newness, isn't the system leaving everyone with too much stock and too few sales?

    Ian Wright
    Fashion Director, Drapers

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  • Yes. If it drives business to the site and increases sales then why not? A businesses primary concern should be making money - not worrying about treading on the toes of independant retailers.

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  • No. Protecting margin and full price sales is the focus for even the hardiest of early high street discounters, all this does is condition consumers to expect sales.

    Devaluing the product is one view, perhaps it was overvalued in the first place! In this sector and at this price level, there is only a finite pool of consumers so competition is rife, perhaps the market is overcrowded with retailers or the average price level needs to fall to make sure product clears at full price. Brands must take the decision here, or buyers must edit back the assortments.

    It's not an independent vs multiples debate - all retailers and e-tailers offering a point of difference will survive, independent stores are challenged by footfall but gain by offering service and advice, the Internet exists to offer more choice to the consumer by assortment width or price.

    For discounting, it's not up to brands alone, it's up to retailers to switch focus and change seasonal calendars. Why on earth do we launch Spring/Summer in December and Autumn/Winter in July?
    The weather does not follow this agenda so is it any wonder rates of sale are below expectation to force sale, cut margin and take early budgets.

    Let's learn something from our European colleagues who have true seasonal sales in a pre-defined sales period, time for market intervention.

    Or maybe we should reverse the trend and have sales at the beginning of a season, sales are motivated when stock cover is too long and stock needs to be turned to cash, rather than penalising the early adopters by discounting later and consumers waiting for sale, let's take a modest margin at the beginning of the season with lower prices to sell the stock as it arrives and increase prices as we go through the season so people know to buy early.

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  • In a way, all of the above comments are true. In short, the trade is in a complete mess because it is run largely by a bunch of cowboys.

    We have online sites with 'market trader' philosophy of working on almost no margin which therefore devalues the brands severely, then in turn many of these brands have absolutely no balls to do anything about it, watching these brands go slowly down the pan because they can't see beyond figures, until of course, it's too late.

    As a previous poster said, it is not indie v multiple. It is about having the right people at the right brands showing the way forward of the relationship between retailer and brand. Working with each other to create a good image and margin for the short and the long term.

    Compared to years gone by, many reps are merely monkeys who cannot make decisions and have little interest, empathy or understanding with the retailer, unless of course, you do the big bucks. And that I'm afraid, is the bottom line.

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