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Battle for full-price?

As Drapers reports that retailers and shoppers could be locked in a battle of wills this Christmas over the contentious issue of discounting, Ruth Faulkner considers who is likely to be the real winner this festive season.

To discount or not to discount? That is the burning question for most retailers especially when it comes to their critical Christmas trading period.

A survey of 3,339 consumers commissioned by private sales etailer Brand Alley and carried out by YouGov found that 53% of shoppers are planning to wait until retailers go on Sale before shopping for Christmas.

However, by contrast the UK high street is noticeably less promotional than it was at this time last year with colder weather helping to drive sales of winter product.

There is no doubt that the issue of discounting divides opinion, so much so, that some retailers have actually spoken out against it, saying they won’t discount at all outside of set sale periods.

Speaking at the Drapers’ fashion summit last week the chief executive of premium womenswear retailer Jaeger, Stewart Binnie, said he had taken the difficult decision to sell at full-price regardless of the wider market.

And guess what? Binnie says the move has paid off. Similarly Fat Face chief executive Anthony Thompson said earlier this year that he was planning to do something similar.

There are those who would say the likes of Jaeger and Fat Face should be applauded for this stance while others would argue that is foolish to make such a bold move in a retail climate where consumers have become trained to expect discounts from the high street as a matter of course.

The research from Brand Alley found that 86% of respondents would shop around for a bargain and were not brand loyal. With that in mind the stance taken by Jaeger and Fat Face could arguably be fruitless. But, by the same token, without a stance like that, how are we ever going to re-educate the consumer to buy at full price?

The outcome of this battle of wills is a difficult one to call. I am of the opinion that the high street has, in recent seasons, been too promotional and so holding out on going on Sale can only be a good thing.

However, if consumers are insistent on waiting for bargains then retailers may well be forced to cave in. They don’t want to miss out on sales, albeit discounted ones, because they tried to hold their nerve for too long.

Although, ultimately, Christmas takes place on December 25 and will go ahead regardless of whether or not the retailers go into Sale early. So perhaps, on this occasion, the high street is in a unique position to win this particular battle.

Readers' comments (3)

  • Thierry BAYLE

    To discount or not to discount?
    Is that the real problem? Is cash the real problem?

    Some large organisations may (only may) be willing to delay taking more cash from a perishable product but the majority of smaller boutiques must take action now otherwise cash will not be there to pay for fresh new goods and the invoices.

    Why do you need to give discounts to customers?
    * Because we are overstocked
    * Because we need cash to pay the invoices
    * Because we need space
    * Because we want to gain traffic
    * Because it is the end of the season and we need to clear the current season's goods.
    * Because we need to attract traffic in our store due to the competition offering discounts ( potentially the absence of discounts offering could push the consumers to our competitors' stores ("86% of respondents would shop around for a bargain")

    Thierry B.
    globalfashionmanagement -management one
    PS Let's go for a break.

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  • Thierry BAYLE

    Based on the above, we can see the importance to have an accurate sales forecast / Open To Buy plan.

    As we have been providing an OTB plan for the past 20 years, we often see some product classes which are understocked which mean that we are not making as much sales as we should.
    If only the retailer had the right numbers and was bringing goods in the right amount & at the right time, the extra sales and profits generated could allow the retailer to delay the time when discounts are granted.

    Thierry B

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  • www.Anthony&

    Thierry has it right in my opinion.
    People are shopping round more and more, especially with the internet making it so easy to compare prices.
    Money is tight and customers are after getting the best price for their goods - if that means waiting a few months for the items to be on sale they are happier to do so.
    Shop owners have to be smarter than before when making their orders and be very on the ball to compete with other retailers online.

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