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Monday, December 22, 2008

Discount or Bust

The LA Times reported today that it seems that all shoppers have to do is ask if they want a lower price. This is important information for retailers especially during rough economic times, and especially around the holidays.

Here is the excerpt: With sales slow at virtually all retailers, experts say customers now have the upper hand. And even some who don't explicitly ask for a discount or price-match are pressing for better deals. Jill DuPont the owner of a small women's clothing and accessories boutique called Out of the Box in Greenwich, Conn., said she's felt some pressure to mark her prices down to be competitive with others. "Customers aren't shy about telling us 'what a good price' they found somewhere else," she said.

From a marketing standpoint, discounts and price drops can be a good way to get rid of stock before the New Year. On the other hand, retailers should be careful and give discounts in moderation. Businesses that offer free or significantly lowered prices run the risk of devaluing their product or service.

It's important to be competitive with pricing, but offering too much for free can potentially discredit the service, product or intellectual property. Lowering cost for customers can be good karma, but losing money will do nothing for your business if you don't have profit to show in the end.

Additionally, the International Council of Shopping Centers predicts that this season's sales will be the weakest season. Even massive discounts on Black Friday - historically the point when retailers begin to turn a profit -- didn't do much to help boost sales.

1 comment:

  1. Now if only AT&T wouldn't require me to sign a new two-year contract when I'm already paying full-price for an iPhone...