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Drapers Debate: Has discounting got to stop?

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…

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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.

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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.

Readers' comments (5)

  • Discounting will always happen. The issue isn't discounting it is that the high street has educated consumers to expect discounting practically all the time. Blue X sale anyone?! The result is that people are not prepared to pay full price any time. Good for Fat Face for educating their customer to be prepared to pay full price for a longer period.

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  • www.Anthony&Brown.co.uk

    Nice article, as a retailer it is very difficult not to have longer periods of sale periods - if you dont shift all the stock then you end up with stock you cant discount again till next sale period.
    Stock held is wasted cashflow.

    From the flip side if a store was to stick to Sales for first 2 weeks in Jan and July then people would buy more full price items and increase their margins.

    I as a retailer I will be addopting Fat Faces model as long as cashflow allows.
    If all the other retailers were to follow suit then all stores would do better as it would force the consumer into having to pay more for the brands they love.

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  • To me discounting is like a blinking competition and the consumer will always win so bite the bullet and stop it. If you’re constantly discounting you’re not attracting loyal consumers your pandering to people who shop anywhere on a price they have no brand loyalty.
    My biggest bug bear is discounting for new customers why not reward the customers who shop with you consistently.

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  • darren hoggett

    Generally speaking, if you're a well run business you don't need to discount, though there will always be exceptions. One area that gets overlooked are the brands themselves - They aren't helping either by heavily discounting on their own sites, therefore placing unnecessary pressure on the retailer to do the same. This blinkered attitude has to stop - and quickly.

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  • Yes it definitely has to stop. After seeing e-tailers such as net a porter and sister site mr porter slash their prices by 50 to 70% at end of season sales, why would the average person want to pay full price a few months earlier. Heavy discounting is just damaging brand value of premium brands.

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