|To Discount Or Not To Discount? That Is The Question
In retail, it’s an age-old question of whether it is a good strategy to discount products. It’s not only about whether or not it will dilute the brand image, especially when it comes to high-end global luxury brands, but it is also about timing should a retailer decide to try discounting. In the discount game, there have been winners and losers.
JC Penney was one retailer that did not win at the discount game when it tried to get rid of its long-standing coupon strategy and replace it with what it termed “everyday low pricing.” Instead of winning more customers to its new discounted retailer image, JC Penney lost customers because it appeared as though consumers were more about the idea of something being on sale than they were about wanting to be seen shopping at a discount store.
In this situation, the discount game took away from anything positive in the retailer’s brand image, replacing the idea of value with a sense of cheapness in the minds of consumers. Even an attempt to bring back the old strategy has yet to really help JC Penney regain its footing in the retail market, illustrating how such a dramatic shift in brand image can truly alter audience perception about that brand.
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This article originally appeared on Forbes.com. You'll find a link to the original after the post.
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