{"id":6504,"date":"2018-08-16T16:32:48","date_gmt":"2018-08-16T16:32:48","guid":{"rendered":"http:\/\/www.thesocialcmo.com\/blog\/?p=6504"},"modified":"2018-08-16T16:32:48","modified_gmt":"2018-08-16T16:32:48","slug":"retailers-discounting-your-way-out-of-trouble-is-a-death-spiral","status":"publish","type":"post","link":"https:\/\/www.thesocialcmo.com\/blog\/2018\/08\/retailers-discounting-your-way-out-of-trouble-is-a-death-spiral\/","title":{"rendered":"Retailers: Discounting Your Way Out of Trouble Is a Death Spiral"},"content":{"rendered":"
\"Retailers:<\/div>\n
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Why ditching the discount and dialing up the customer experience (with a focus on flexibility) is more likely to deliver success.\u00a0<\/strong><\/p>\n

When a\u00a0marquee brand<\/a>\u00a0or\u00a0major, traditional retailer<\/a>\u00a0releases a disastrous earnings outlook, what is the first thing they usually do in an effort to bail themselves out? Far too often, they believe that they can discount and promote their way back into customers\u2019 hearts, which misses the entire point of why they\u2019re in trouble in the first place.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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The truth is that there are always companies that offer the same products, and that the race to the lowest price rarely ends in profit. If big, struggling, traditional retailers wish to survive, they need to change their entire outlook on marketing before they worry about offering deals.<\/p>\n

Panic vs. strategy<\/strong><\/h3>\n

Discounting and promotions are short-term plasters for long-term problems, and really just serve to delay the inevitable. If the lowest price is all that a consumer is after, they\u2019ll just search for the product online and have it shipped to their door. So reaching today\u2019s consumer \u2013 especially the younger generations who grew up in this digital world \u2013 requires a different outlook, centered on relationship-building and strong customer experience.<\/p>\n

If you look at a brand like Dick\u2019s, whose CEO\u00a0<\/em>publicly stated that retailers should be in \u201cpanic mode\u201d, you can only shake your head. Nobody makes good decisions in \u201cpanic mode\u201d, and sure enough, the plan to counter that panic involves a heavy dose of discounts.<\/p>\n

And then there\u2019s Coach, which also had a less-than-stellar earnings call, but rather than panic, they\u2019re trying to accomplish something by \u201cshrinking to grow\u201d through a $2.4 billion acquisition of\u00a0Kate Spade<\/a>. Branching out by bringing in a brand that can serve as an entry point for young consumers is a much more meaningful solution than dropping prices, a strategy that at least has a chance of delivering on its promise.<\/p>\n<\/div>\n<\/div>\n

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\u201cReaching today\u2019s consumer requires a different outlook, centered on relationship-building and strong customer experience.<\/p><\/blockquote>\n<\/figure>\n<\/div>\n<\/div>\n

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The challenge with this strategy is that a major acquisition is only the first step, and many brands still have a\u00a0long\u00a0<\/em>way to go to connect with consumers on a meaningful level. It starts with understanding that consumers are looking for relationships and connections, just as much as they\u2019re looking for the best price. They want a brand that responds to their needs, and takes care of them.<\/p>\n

And who doesn\u2019t?<\/p>\n

Being flexible is key<\/strong><\/h3>\n

In order to build those long-term connections, brands need to look more at the relationship-building side of customer communications, rather than simply focusing their time and effort on advertising and traditional marketing. Take the time to interact, learn about customers, and adjust when things change. A large, Wall Street-reliant, public corporation, has a lot of trouble adjusting to this simple reality, which is why so many of those retail brands are on their death beds\u2026 I call them \u201cThe Walking Dead.\u201d\u00a0They are so often tied to the stock price = financing costs = keep top-line sales up at all costs death spiral.<\/p>\n<\/div>\n<\/div>\n

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\u201cThe most successful brands today are willing to try new things, keep what works, and toss what doesn\u2019t.<\/p><\/blockquote>\n<\/figure>\n<\/div>\n<\/div>\n

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It doesn\u2019t have to be that way, but they\u2019re simply too slow to adjust, and are motivated strictly by their stock price and Wall Street expectations. Success in the digital world means planning for the near future, and being prepared to move when things inevitably change. A locked-in, long-term approach focused on discounts leaves no room for adjustment in an era where flexibility is constantly required. The most successful brands today \u2013 large and small \u2013 are willing to try new things, keep what works, and toss what doesn\u2019t.<\/p>\n

Smaller businesses have fewer stakeholders to answer to, and that often gives them more freedom to experiment to find what works. But that\u2019s no excuse for large retailers to sit idly by. If the team in charge isn\u2019t willing to try something new, then maybe it\u2019s time to find a new team\u2026 or more importantly, new leadership.<\/p>\n

#RetailRelevancy<\/a>\u00a0#FollowThePath<\/a>\u2026\u00a0#NoLetUp!<\/a><\/p>\n

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Previously posted at\u00a0TedRubin.co<\/a>m<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Why ditching the discount and dialing up the customer experience (with a focus on flexibility) is more likely to deliver success.\u00a0 When a\u00a0marquee brand\u00a0or\u00a0major, traditional retailer\u00a0releases a disastrous earnings outlook, what is the first thing they usually do in an effort to bail themselves out? Far too often, they believe that they can discount and … Read more<\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-6504","post","type-post","status-publish","format-standard","hentry","category-tedrubin"],"_links":{"self":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/6504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/comments?post=6504"}],"version-history":[{"count":1,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/6504\/revisions"}],"predecessor-version":[{"id":6505,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/posts\/6504\/revisions\/6505"}],"wp:attachment":[{"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/media?parent=6504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/categories?post=6504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thesocialcmo.com\/blog\/wp-json\/wp\/v2\/tags?post=6504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}