As we enter the holiday season retailers are exploring a wide range of steps to remain competitive. One strategy to generate interest among shoppers is providing discounts on a wide range of products. With decreased demand in a wide range of sectors, retailers are introducing significant discounts to clear excess stock. Many retailers without overstocking issues are now being forced to offer deep discounts as a marketing strategy in order to maintain visibility.
Following a decrease in consumer demand in many sectors, large numbers of retailers have introduced discounts to clear excess stock. With high demand seen for a wide range of products in 2021, retailers increased stocks in anticipation of similarly high demand in 2022. Decreased demand across some sectors has led to retailers overstocking their shelves. This is a key motivating force behind discount initiatives for some retailers.
Considering how widespread these discounts are many retailers are now struggling to stand out. Deloitte’s Ron Sides highlighted the extent of the challenge stating that consumers will not respond to discounts beneath 20%. Retailers have described the balance between discounting products to generate interest and ensuring commercial viability. This is an important consideration as many shoppers have come to expect discounts, especially during the holiday season.
Catbird founder Rony Vardi described some of the key considerations retailers are factoring in when discounting products. Having been in business since 2004, this year marks the first time Catbird has offered 20% discounts on products. Vardi discussed receiving email marketing from other companies offering discounts up to 60% and stated that the ubiquity of discounts and offers from competitors contributed to Catbird’s decision to offer 20% discounts this holiday season.
This increased focus on discount-based promotions has been seen in a wide range of businesses. Kate Ridley, Allbirds INC’s Chief Brand and Product Officer explained that the company has implemented a wider strategy around discount promotions. Ridley discussed the company’s approach saying that quarterly promotions, this was far more frequent than promotions in previous years. Rather than overstocking issues, market competitiveness was cited as a key motivating factor.
Other companies have not responded to patterns of increased promotions. Where a business has a loyal customer base it can rely on this brand equity to avoid significantly discounting products. CEO of Yeti Holdings Inc. Matthew Reintjes discussed the fact that stable pricing can be beneficial: customers have a consistent expectation from a price standpoint. Consistent pricing can also be viewed as an indication of high-quality stock.
This is the exception though and many businesses are viewing discounting as a favourable promotional strategy for online advertising. Dagne Dover’s founder Deepa Gandhi described a wide range of factors motivating the shift in the budget towards discounting. One of these motivators was that it rewarded customer loyalty. Another key factor was that it led to a higher success rate as a promotional strategy.
When demand levels fluctuate businesses can be left with overstocking issues. This prompts many businesses to introduce discounts. As other businesses introduce competitive promotions to keep up, this can benefit consumers. The key challenge for businesses is ensuring that visibility is increased without losing out on profits through significant price cuts. As businesses navigate these competing factors, analysts are expecting to see the pattern of increased discounts continue to spiral over the coming months.
As we enter the holiday season retailers are exploring a wide range of steps to remain competitive. One strategy to generate interest among shoppers is providing discounts on a wide range of products. With decreased demand in a wide range of sectors, retailers are introducing significant discounts to clear excess stock. Many retailers without overstocking issues are now being forced to offer deep discounts as a marketing strategy in order to maintain visibility.
Following a decrease in consumer demand in many sectors, large numbers of retailers have introduced discounts to clear excess stock. With high demand seen for a wide range of products in 2021, retailers increased stocks in anticipation of similarly high demand in 2022. Decreased demand across some sectors has led to retailers overstocking their shelves. This is a key motivating force behind discount initiatives for some retailers.
Considering how widespread these discounts are many retailers are now struggling to stand out. Deloitte’s Ron Sides highlighted the extent of the challenge stating that consumers will not respond to discounts beneath 20%. Retailers have described the balance between discounting products to generate interest and ensuring commercial viability. This is an important consideration as many shoppers have come to expect discounts, especially during the holiday season.
Catbird founder Rony Vardi described some of the key considerations retailers are factoring in when discounting products. Having been in business since 2004, this year marks the first time Catbird has offered 20% discounts on products. Vardi discussed receiving email marketing from other companies offering discounts up to 60% and stated that the ubiquity of discounts and offers from competitors contributed to Catbird’s decision to offer 20% discounts this holiday season.
This increased focus on discount-based promotions has been seen in a wide range of businesses. Kate Ridley, Allbirds INC’s Chief Brand and Product Officer explained that the company has implemented a wider strategy around discount promotions. Ridley discussed the company’s approach saying that quarterly promotions, this was far more frequent than promotions in previous years. Rather than overstocking issues, market competitiveness was cited as a key motivating factor.
Other companies have not responded to patterns of increased promotions. Where a business has a loyal customer base it can rely on this brand equity to avoid significantly discounting products. CEO of Yeti Holdings Inc. Matthew Reintjes discussed the fact that stable pricing can be beneficial: customers have a consistent expectation from a price standpoint. Consistent pricing can also be viewed as an indication of high-quality stock.
This is the exception though and many businesses are viewing discounting as a favourable promotional strategy for online advertising. Dagne Dover’s founder Deepa Gandhi described a wide range of factors motivating the shift in the budget towards discounting. One of these motivators was that it rewarded customer loyalty. Another key factor was that it led to a higher success rate as a promotional strategy.
When demand levels fluctuate businesses can be left with overstocking issues. This prompts many businesses to introduce discounts. As other businesses introduce competitive promotions to keep up, this can benefit consumers. The key challenge for businesses is ensuring that visibility is increased without losing out on profits through significant price cuts. As businesses navigate these competing factors, analysts are expecting to see the pattern of increased discounts continue to spiral over the coming months.
