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Talking Shop: Discounting is the devil, not a necessary evil

With the ever-changing retail scene, one could be mistaken for thinking we are having a retail revolution. If only…

Changes to where and how consumers buy their clothes have only highlighted the problem of discounting.

We need to review the key relationship between brand and retailer. This is paramount in creating a successful business model in which both sides understand each other. It can never be a one-way street if you are to achieve sustainable success. And the chronic levels of discounting in the UK show that this relationship is fundamentally flawed.

The downside of a very London-centric way of doing business is that so few brands get out there and see what is really going on, not only with their brand but with their rivals. This bunker mentality can create an environment for failure. A brand should continually be assessing its retail partners with basic fundamental principles. Is the collection being presented correctly? Does the store and its prices reflect the brand’s position in the market? Are the staff trained to offer good product knowledge and service?

Brands should have balanced distribution and support and understand their retailers. However, with some brands becoming ad-hoc online discounters, they have become poacher and gamekeeper, meaning these principles are too easily ignored.

Discounting is the devil, not a necessary evil. There is no art in selling something below its value. You are not only devaluing that product, you are devaluing everything associated with it – the brand, the store, the product and the staff. It is a self-defeating process.

As our store heads towards its 50th year in retail, we do not play the discount game. Our customers know our collections are appropriately priced and presented in a way that highlights the brands’ qualities, and our service is top drawer. Therefore, discounting and Sale periods are largely redundant as our partners have total confidence in what we are doing.

Do we have all the answers? Of course not. Brands need to look at their portfolio of retailer partners – independents and multiples – and see where it is working and where it is not. They should work with retailers who understand the core principles of the business and cast aside those that do not. If that happens, both sides can have a much more profitable future.

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