To discount or not to discount inventory: That is the question
As a retailer, discounts and sales are an important aspect of your sales strategy, but unfortunately, precisely how, when and what to discount is not as straightforward. Unless you’re a major retailer with advanced software to provide you with data on your customer behavior (and even that still isn’t 100% accurate), then knowing how and when to discount can be challenging.
After all, there are pros and cons when it comes to the discount strategy. For instance, discount too often and consumers will always expect discounts and be reluctant to pay full price and discount too infrequently and your customers might look elsewhere. For emerging designers, we want to strike a balance where your brand is still priced attractively to your target market, without creating the perception of it being a discount brand.
So when exactly should you discount? Discounts are good when you are trying to sell your older inventory to make way for stock, whether it is a new season or to clear out occasion specific items. Discounts or coupon codes are also good when trying to encourage customers to behave in a certain way e.g. offering a coupon code for sharing on social media or referring a friend.
However, instead of a discount, consider a promotional price. This might be a limited time offer where you sell an item at a rate that would entice customers to buy when they otherwise might not. This is a good idea for if you have a lot of a particular item, but it is also selling well. This means the interest is already there, and having an attractive price can result in even better sales.
Another alternative to discounting is offering free shipping over a certain amount or during a certain period with no minimum. This is another technique that can encourage customers to spend without relying specifically on a discount.
