Merchants Feed Consumer Dependence on Discounts
Al Ries, chairman of the marketing strategy firm chairman of Ries & Ries, views rampant discounting by retailers in terms of infectious disease.
He could just as easily have equated it to a bad habit or, going even further, an addiction. Merchants advertise discounts to consumers who act on those offers to make a purchase. Seeing that discounts drive foot traffic, retailers run more deals for consumers to chase after. Eventually, consumers only shop when discounts are dangled.
Writing this week on the Advertising Age website, Mr. Ries observed that you "seldom see a department-store advertisement based on anything except a sale." He points to Belk, Dillard’s, J.C. Penney, Kohl’s, Macy’s and Sears among the transgressors.
Kohl’s according to Mr. Ries, is the worst. He points to what he says is typical language for the chain in a recent mailing. "Start with these incredible sale prices of 20-60 percent off. Take an extra 15 percent off everything. Plus add a $5 bonus."
The quest to spend as little as possible on product purchases has also played into the
"extreme couponing" craze. Brands and retailers that have trained consumers to work for the best deal are now seeking to place limits on just how much shoppers can save.
An ABC News article reported on changes that retailers such as Publix, Rite Aid and Target have made to address the issue. Retailers are limiting the number of BOGO (buy one, get one) offers consumers can redeem, restricting the number of items that can be purchased to protect stock levels.
Shannon Pattern, a spokesperson for Publix, told ABC, "With extreme couponers, it’s a matter of using 50 coupons to purchase 50 items, which creates the problem of clearing out the shelves. We just need to make sure we limit the quantity so that we have enough products for everyone."
- Discountitus, the Disease That’s Sweeping the Marketing Community – Advertising Age
- Target, Rite Aid and Publix Clamp Down on Extreme Couponers – ABC News
Discussion Questions: Do you also see discounting in terms of disease for brands, retailers and consumers? Is there any way for retailers to shake off the discounting bug and still get shoppers into stores?