Fat Face revealed last week that it had slashed the number of weeks per year it is on promotion by two thirds, leading it to deliver sales growth of 7% for the latest financial year. Here the Drapers team argues whether the lifestyle retailer has adopted the correct strategy…
YES – Victoria Gallagher, news reporter
If you were going to buy a new T-shirt but you thought it was going to be discounted in the next week or so would you buy it? I would always hold out and this is the mind-set that so many retailers have convinced consumers into having.
Not so long ago shoppers knew that outside of Christmas and the end of summer, you had to accept the recommended retail price. But looking around the high street now, you rarely find a shop without some discounted items available.
This ultimately lessens the value of products when they are at full price, and establishes a standard value for items that is far below the actual cost of production.
With ready access to ecommerce sites where they can compare prices, shoppers are savvy and so will hold off until the last minute to buy products. Retailers need to be brave and stop discounting – this is the only way to get shoppers used to buying at full price again.
Next is a prime example of how this can be done. Each season the high street giant holds its nerve and only discounts at the end of the season drawing in hoards of crowds.
It may only be August but my thoughts have already turned to Christmas shopping. I would begin my Christmas gift buying now if I didn’t fear that by the time the festive season arrives most of the prices on my presents will have been slashed.
But until retailers start adopting a similar strategy to that of Next and Fat Face I shall shop savvy – and so will everyone else on the high street.
NO – Ruth Faulkner, news reporter
While everyone in the industry is quick to bemoan the amount of time fashion retailers spend on Sale, fixing these periods to a set number of weeks could prove costly for retailers.
If this summer, or lack of it, has taught us anything it is that retailers need to be able to adopt sale strategies in response to tough trading conditions, so they are able to shift excess stock inventory if necessary.
If a retailer such as Fat Face decides that its policy will be to only be on Sale for 12 weeks of the year, what does it then do if the mercury hits the high 20s towards the end of September (as it did last year)? The business is hoist by its own petard - left with jumpers and jackets at full-price, which it just can’t get rid of and it is restricted from going into Sale.
This is equally relevant when you consider footwear retailers. The winter staple of most footwear retailer – the boot – takes up a lot of space in stock rooms and as such, those that sell them cannot afford to have them hanging round, using precious stock room space should the weather be unseasonably warm.
The same is also true in reverse when it is cold or wet during the summer months and retailers can’t get rid of their high summer product.
Weather aside, unless all retailers adopt the same strategy when it comes to Sales, setting a limit ahead of time can only be detrimental. Even if you limit your sale period to fewer weeks of the year consumers will surely still hold out for that Sale, whenever it may come.
Retailers should flex when they discount, retaining the ability to slash prices of seasonal items that aren’t selling as and when they choose while avoiding the habit-forming practice of discounting at the same point every year.