There are times when the UK high street reminds me of an episode of The Walking Dead.
Forget Brexit, exchange rate pressure, spiralling rents, rates, and labour costs. You can even forget the weather. These challenges are nothing compared with the virulent scourge of constant discounting now endemic in the UK. Discounting is in danger of making zombie retailers out of all of us.
So, how do we find a cure? First of all, we have to identify the real issue. Discounting is a symptom – not the cause – of the real virus. To find a cure, we need to go back to basics. Great product sells at full price. Poor product doesn’t.
Discounting is in danger of making zombie retailers out of all of us
What we need in the UK is greater leadership and courage at the top of our clothing businesses. We all need to look in the mirror. Holding your nerve and staying full price doesn’t take much courage if you keep stock tight, and promoting your way out of average product takes even less. Creating the conditions for success in the design and buying teams up and down the country is where we need to be brave.
We must invest in young talent across the industry and encourage them towards quality, newness, creativity, innovation and having a strong point of view. We should stop banging the drum about intake margin with our teams and suppliers, and kill the pointless “race to the bottom”, before it kills all of us. Give the industry margin to breathe and the time to be creative.
Constant discounting is not the real issue. The real problem is that we have all started to look the same. A vibrant clothing market provides real choice for customers, not rail upon rail of “me too” product, dumbed down by margin pressure and discount. The UK customer deserves better and, given that we have some of the best brands in the world on our high streets, I am sure that, with a bit of courage and less focus on short-term results, we could reverse the cycle of discount we seem trapped in as an industry.
So, rather than engaging in a discounting price war with each other, imagine a retail world where we put our energy into figuring out how to differentiate by designing new, innovative, quality products that people really want and get excited about again. We could then start to measure the health of our market with full-price like-for-like sales and the discounting zombies will wander elsewhere.
Why do retailers feel compelled to discount?
Drapers carried out an exclusive online survey of more than 300 brands and retailers.
- When asked for the main reason why they felt compelled to discount, 32.2% said it was to keep up with competitors, while 20.1% said it was in response to demand from consumers and 19.6% said it was because they had stock to clear.
- Almost half – 41.9% – of respondents go on Sale twice a year, which tallies with the traditional end-of-season stock-clearance cycle. But almost as many – 41.4% – go on Sale four or more times a year.
- When asked to estimate for how many days they were on Sale last year and for how many they expect to be on Sale this year, the answers were, respectively, 76 and 78 days on average.