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How Retail Brands Can Create A Full Price Buyer

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How Retail Brands Can Create A Full Price Buyer

In the constant pursuit of increasingly unrealistic targets, the need to shift excess inventory and lack of customer understanding, retail leadership teams are too focused on quick wins such as heavy discounting to achieve short-term results, not realizing the long-term damage they are creating to their brands.

The constant promotional and discount culture, that admittedly works to temporarily increase traffic, drive units and achieve sales targets, not only reduces profit, but ultimately devalues the brand and worst of all, trains the customer to only buy on discount.

Brands used to hold all the cards; they controlled the profit margins, deciding when and how the customer purchased on discount. And those periods were limited to key sales periods; Christmas and Summer. But over time, poor merchandising choices, unrealistic shareholders and disjointed leadership, meant that Christmas sales started earlier and earlier, with some brands now on 50% off by early December.

Throw into the mix longer and more frequent sales, the adoption of promotions such as Black Friday, Cyber Monday and layer on the inability to join up bricks with clicks, and you’ve got brands who place more emphasis and effort on promotional calendars than their marketing calendars.

A new collection or product line is launched, and immediately a promotion is layered on top to drive traffic and sales. Running parallel there may be a multi-channel marketing effort; wasted budget when you’re ultimately telling the customer your brand isn’t worth buying at full price. The message is mixed, leaving the customer confused.

Apart from in certain European countries, where the government has strict regulations on when, how and what the brand can promote or discount, a walk down most high streets, main streets or shopping malls will be met with various levels of discounting. Brands look desperate now – and desperation stinks.

Enter Customer Control

Today’s retail landscape means that when a brand launches a new product, the customer is in control. It’s almost got to the point where they decide how much to pay; if they hold out for long enough, that new season dress will be on 20% off next week.

And hands up who hasn’t searched for a discount code?

To achieve break through and actually convert the customer is becoming harder. The daily emails, promoted posts, window posters and BOGOF shelf signage are all so ubiquitous they’re now wallpaper. I went into a store the other day, having missed a 50% off promotion a few days before, and was reluctant to buy an item at 40% off. That’s still a heavy discount, but I’m so used to that brand always promoting their product, I was reluctant to purchase.

Retail discounting is not new, and there’s a reason why; it creates sales, sells units, increases traffic and gets clicks. However, by constantly promoting, retailers are ultimately showing they don’t have the confidence in their brand equity. And by relying on quick wins, they’re ultimately creating a huge value deficit and brand indifference for their confused customers. Confused customers are fickle and we don’t want to buy into a brand we don’t value anymore.

Creating A Full Price Buyer

So, how do you retrain the customer to buy at full price? If you stop discounting product, the customer will eventually acclimate to the change and buy at full price. Surely…? But we all know there’s no one single solution and it’s a long and slow battle that requires steely nerves, cross-functional participation, leadership support and investment.

Small incremental changes can make a difference in the short term; slowly reducing the number of days on promotion (‘going in deep, getting out quick’), understanding the customer responds to the ‘promotion’, not necessarily the level of discount and segmented promotional offerings depending on customer behavior (one size doesn’t fit all).

Likewise, adapting the kind of promotion you execute, creating “healthy” promotions and really responding to your audience will go a long way. Take Patagonia for example, in 2016 they donated 100% of their Black Friday sales to grassroots foundations, creating an ethically appealing promotion their customers responded to.

To do this, brands should focus on consistent customer experience (both on and offline), adding value (surprising and delighting), looking after the core customers (rewarding them), engaging with their audiences (on a personal level, showing they really understand them) and being creative with ALL brand communication (keep blipping on someone’s radar). But most importantly, brands must be present and relevant wherever their customers are.

Retail brands will only be able to turn things around when their leadership ensures there is cross-functional collaboration throughout the business. But they must go further. They must ensure that there is a continued investment in brand, marketing and design. They need to improve efficiencies in the product pipelines. And quite fundamentally – they must have a deep understanding of the customer.

When all of these things are considered (and addressed) as one, then customers will eventually want to invest in buying more products at full price. But only if they truly value the brand behind everything.

Increasingly, this requires an external, objective perspective to challenge a brands’ status quo and rebuild brand equity. In such turbulent times, creating a distinct voice that stands apart in a crowded space is vital. And it’s only going to become even more so as new, younger, more agile players come into a market.

Contributed to Branding Strategy Insider by: Amy Howarth, Strategic Head of Retail Marketing at We Launch

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