In the beginning, there were a handful of days that we waited for. Of course, birthdays and anniversaries and long weekends topped the list, then only to be joined by the End Of Season Sale days. Today, with the online channels and stores bombarding us with an endless barrage of lip-smacking offers on a daily basis, and prices getting cut-throat competitive, will retailers (brick and mortar) and very soon, the online players themselves, witness a slow death of the End Of Season Sale?
Nearly a decade ago, when I started my career in retail as Head of Marketing for a large, popular department store, organised retail was just coming into being. Consumers were excited by the shiny big formats and the novel items their shopping baskets brimmed with. It was my job to ensure that they came back for more so, huddled over late nights of coffee and exhaustive plans, we devised impressive ways and means to fill our floors with more footfalls. We didn’t want customers to just drop by and say hello, we wanted them to enter into a long term relationship with us. We wanted them to graduate from just buying a product to satisfy a need, to becoming a bigger part of the brand’s story.
So we crept into their minds and hearts and did our best to earn their loyalty, which would translate into a far more attractive transactional value.
If my annual marketing plan had more than one promotion (excluding the two ‘end of season sales’) tethered to discounts, I would have been scorned upon by my seniors and earned the reputation of being a lazy thinker. Our challenge was to conceptualize experience centric promotions which would create stronger bonds that were emotional instead of transactional, and which inspired loyalty both for the store, and the brand. Was this a tough task? Absolutely!
As malls mushroomed, so did competition and many retail stores were beginning to realize that the fastest way to the consumers’ hearts was through their wallets. Indian consumers being value-conscious, price cuts and discounts were instant crowd-pulling hits and inundated our lives with alacrity. And slowly, the once much anticipated ‘Sale’ turned into a ubiquitous event. So much for those endless sleepless nights!
A dirty four-letter word
It is 2017 now and not much has changed since then. In fact, I would say it has become worse. ‘Sale’ has become a dirty, four letter word and continues to rule, but in different shapes and sizes and monikers. So if it’s not the ‘Wednesday Bazaar’, it’s the ‘Maha Bachat’ or ‘Sabse Sasta Din’. There are also ‘Half Price’, ‘Stock Clearance’ or ‘6 am’ sales and if nothing works, the ‘Flash Sale’ that leverages FOMO (the fear of missing out) on a good deal or offer.
Then came the online players with their own masala maar ke which put the brick and mortar stores in a spot. They made it even more tempting with quick discounts, specialized category based discounts and that too, on a regular basis. So you can ‘Unbox’ a sale or you can have a massive 3 day shopping festival called ‘The Great Indian Sale’ or ‘The Billion Dollar Sale’. (As I am writing this article, my inbox has already flashed 7 sales and discount offers in my face) Yes, the key word is SALE! Not one to be left with sweat on their brow, the brick and mortar retailers are now offering some discount or another under the garb of a promotion.
In all this excitement to grab share of wallet, retailers – both online and offline – seem to have forgotten the meaning of value. Sales existed even when I was a child, but they meant something other than reduced prices. A sale signified the ushering in of a new season – a soon-to-arrive new product range, freshness, and an invitation to fill your life with new things. This is precisely why they were called “End Of Season Sales”! Today, with sales becoming an everyday occurrence, we are losing out on this excitement of new. What we are actually saying is, it is ok to buy the old as long as it is discounted. It is about bargains and not about the emotions.
The beginning of the end
With a sale happening virtually 365 days of the year, I started to wonder if the End of Season Sale (EOSS) made any sense to consumers anymore. A few years ago, this would be a date to be blocked in calendars. Most purchases, especially for gifting purposes, would be stalled till such time. Women prepared themselves for the binge shopping while their men cringed. An EOSS gave life some purpose and was the perfect excuse to reinvent one’s wardrobe, home, or what have you. All the sales began and ended on the same day. As a result, the lines were long, time was short, and tempers shorter.
Today, the sale is akin to a race, or so, most retailers perceive it to be. There is competition in who starts first and who ends last though in my opinion, finishing last is not such a bad place to be in. Sales are spread all through the year so does it really matter which part of the calendar you are in? Consumers will still go ting. It is like the classic Pavlovian response – we have trained our consumers to get out their wallets and head to our stores and shop the moment they hear the word SALE!
In the process, tenets like brand loyalty have been completely eroded especially by the online retailers who ply their business on deep discounts and predatory pricing. They have ended up creating a commodity business where the product or brand has no emotional value and only price matters. With offline retailers also attempting to follow suit, it is difficult for any player to build his value or loyalty on the power of the brand.
Retailers have created a monster
The bad news is, the monster is growing bigger and greedier and is beyond control. You might think that the hunger for discounts has only made the job of the Marketing Manager easier. On the contrary! Without the ‘D’ or ‘S’ word, will they still be able to drive footfalls into their stores?
We decided to put this theory to test.
We floated some questionnaires on social media to an open, unbiased audience that was gender, age, socio-economic and channel agnostic. Over 80 consumers across the country responded. We also posed a questionnaire to retailers and received over 30 responses.
Here is what the retailers had to say:
We have created a monster we are no longer able to control. It all started with a little carrot, a little temptation to get their attention. Like indulgent parents who cannot get anything from their kids unless treated or bribed, we have created a situation, that is, a sale-based bias in consumer shopping. Like a drug, this has created an addiction, without which consumers choose not to function. Hence, a sale was imperative to lure consumers right to your door.
It was easy and this made us lazy so much so that we stopped using our brains. Today almost 60 percent of the retailers run promos and discounts on a monthly basis (and we are not just referring to food and grocery retailers). Apart from this breed is another who believe in running promotions once every two months. Add the two and the number jumps to 77 per cent.
Need we say more?
Savvy consumers do not feel the need to shop during non-discounted periods if there are discounts throughout the year. Now this is where I can actually hear you retailers talk about the power of a brand, or the commitment of loyal customers and all those things retail textbooks taught us to think.
Put yourself in your customers’ shoes, would you shop during no-sale periods? Not unless it was unavoidable. More than 50 percent of the retailers admitted to running promos for a period of more than three weekends, and End Of Season Sales pushing all the way to eight weeks. Like we said earlier, we have spoilt our customers. Should we then be complaining about the fact that we are totally ignored when we do not have promos or any other money-saving scheme to offer?
Time to think afresh
There is a divided opinion on the relevance of EOSS in today’s discount-induced world. Given the fact that there is a discount, promotion or sale with every breath you take, 47 percent of the retailers believe that consumers are no longer waiting for an EOSS to shop and a whopping 58 percent believe that the concept of EOSS should be discontinued. If retailers themselves believe that the EOSS is no longer a driver to purchase, then isn’t it time we re-looked the concept of sale and came up with a reason far more compelling?
Today’s retailers have to think differently and move away from discounting. They need to focus on creating value for their customers, one which will build loyalty and bring them to their doors even without the tempting discounts and offers. In a time where the customer journey has changed, and retailers are talking about service, engagement and experience as strong differentiators, it is time they also devised new interesting ways to put these into practice and reinvent the marketing calendar.
Overindulged and underestimated
Since the advent of organised retail nearly two decades ago, consumers have evolved. Have they become savvier, more rational, less emotional? How different are the mindsets and shopping habits of the Millennials from those of Gen X? What if the carrot dangled differed according to each audience, would that change the buying behaviour?
Retailers across both channels have applied the same sale/discount brushstroke across all consumer types. It would be interesting to see how this delivers in the long term.
We thought we would understand what makes the consumer tick. Are they as excited about promos and sales as the retailers believe? Do they wait with bated breath for sales and discounts? Do they not shop if there are no money-saving offers?
This is what we learnt:
EOSS and promotional offers are great but consumers do not delay purchase decisions basis the same.
66 per cent of the consumers said that they shop irrespective of whether there is a promo/sale or not. Millennials are not willing to wait for what they want, no matter how much more they have to shell out for it. They are a here and now generation and will pick products which they desire when they desire. They will drive a hard bargain at the point of purchase but will not delay purchase for a better deal. Maybe we need to understand what will drive these consumers into our stores – online or offline – and keep them coming back.
63 per cent believe that given that there are offers running all the time, there is no need to ever wait for an EOSS. In fact, so inundated are they with offers, that the EOSS seems to have lost its sheen and even scarier, its relevance.
There is no significant difference in when they spend more or why they are willing to do so. They seem to be spending evenly during discount and non-discount periods. Apart from that, the willingness to spend higher between sale and non-sale periods is more or less the same. Are we missing out on something here? Do we really need to discount our brands all the time or can we encourage the consumer to buy even more without discounts? In this whole process, are we also discounting our image?
Pride of ownership above promotions
When was the last time you saw a Harley Davidson offer a price-off? Die-hard Apple loyalists are known to spitshine their MacBooks; do you ever see someone doing that to their PC?
You know the power of a brand when brand loyalty overrides everything else. This is what retailers need to understand and leverage to bring their customers coming back, for something above and beyond the attractive incentives we offer.
Today, customers are over exposed and evolved. They understand the importance of value and are willing to trade in a price cut for better customer service, better post-purchase service and shorter delivery periods. As retailers, we must focus on creating emotional differentiators which connect with the consumer at a fundamental level – be it common values, common beliefs – which bind the consumer to the brand beyond discounts.