Jo Davies is the owner of premium womenswear retailer Black White Denim in Wilmslow, Cheshire.
In August, as we were winding up our summer Sale and merchandising autumn/winter, a lady came into the store for some new jeans and tops.
“I’ve £600 to spend and want a 20% discount,” she announced.”We don’t offer discount but have a fabulous loyalty scheme,” replied our store manager, very politely.
“Your boss always gives me a discount,” came the reply.
“I’m very sorry but we haven’t given discount since we launched our loyalty scheme a year ago.”
“Right. I’ll come back at the end of September when you have your annual shopping event and get the discount then.”
Off she went. It was as much as I could do not to follow her out and explain how the retail balance sheet works. It made me even more determined to protect my margins this season.
Since I opened Black White Denim four years ago in the recession, we’ve been walking a financial tightrope. My business has spent its early years fighting a discount culture that has almost finished us off. Hands up, we’ve used promotional pricing to drive traffic to our website and store and shift overstocks, but as the customer becomes more demanding, we’ve had to find more creative ways of adding value than simply giving money away.
Our loyalty scheme has gone down a storm. Customers (even those with second homes in The Bahamas) love getting a personal text message telling them that they have £50 on their reward card to spend. It encourages them to park the new Bentley outside and take advantage of their ‘treat’ sooner rather than later, spending another few hundred quid on top. I also use our own brand of premium basics to treat our most loyal supporters. Often a ‘free’ cotton vest or tee finds its way into a customer’s bag as a token of appreciation.
Because of the attitude of the customer I mentioned earlier, we didn’t run our September discount event. It was a huge risk but we had an amazing month regardless and most importantly we delivered full margin. Sometimes you need to ring the changes!