As you know, everywhere you look as a consumer there are deals. Buy this Groupon, check out this flash sale or load up on coupons, double coupons, etc. from your favorite store. For some retailers, this discounting craze has become so insane that they are actually making rules to make extreme couponing impossible. And there are so many deals out there that some websites now offer daily emails with compilations of all the daily deals for you.
However, even with this huge dynamic shift that the retail industry has seen in the last few years, some things still remain the same. Discounting and couponing is not the answer. You still can thrive and successfully compete if you are special and offer great products, coupled with a unique experience for your customers, day in and day out.
As there are so many sale options for shopping these days, we wonder why does anyone have the need to pay full price anymore? How severely is this trend effecting stores in spite of their denials?
Many consumers monitor various daily deal sites and have completely forgone loyalty for where they can get the best deal. A recent WSJ article talked about the multitude of deal options. Another article talks about the extreme couponing trends. You are surrounded by the hype about all the deals.
As a consumer, while you may not deliberately avoid places you used to shop, many of your needs (and hence your spending) are being served by deals that come right to you. This is also probably impacting the restaurants that you frequent since you are more likely to go and use that Groupon that you have been sitting on than dropping more cash at your favorite restaurant. And all of this is then putting the hurt on almost all regular price stores that don’t know how to effectively compete on anything but price.
Which is why stores like Apple, Lululemon, and American Girl stores that offer unique items and experiences (and do not partake in discounting or daily deals) do so well and are considered Wall Street “darlings” — i.e. Lulu has gone from $30 to $122 in the past 12 months during a period where most all retail stocks have struggled.
So you may be asking yourself…as a retailer competing in this environment, how does Retail Concepts suggest you handle this deal proliferation? In our opinion, it has to be by becoming like Lululemon, Apple, American Girl, or Whole Foods in a way that makes sense for your brand. We suspect your response will be “how can I do that?” Well, each of these stores was once small. And for each of those big guys there are small ones too like the Johnny Cupcakes, Flour Bakery and T-Shirt Deli’s of the world who do just fine by offering unique experiences and relevant products.
What have you done in your store or seen retailers doing to compete against this discounting dynamic?