A couple of days ago I read a great article by Matt Powell, Vice President and Senior Industry Advisor at NPD, in his Sneakernomics series: “Nobody Wins A Race to the Bottom“.
Matt addresses the issue of widespread discounting during the holiday season. He says 2018 was the “most promotional” on record, with discounting happening before Black Friday and well after the Holiday season. His opinion is that this discounting is coming at the expense of wholesale partners, retailers and the brands.
The Solution? Inspiration & Aspiration. But From Where?
Matt laments the loss of aspirational and inspirational advertising and marketing that encouraged people to take up sports, consequently growing the sports and the associated brands.
It’s a great article and I’d like to add my two cents.
Instead of discounting, which trains our customers to wait for the best price, why don’t the brands tap into an obvious source of inspiration: the customers. Sound circular? Stay with me.
If the brands measure the authentic feedback from customers through product reviews, they would understand the customer-speak about their products, which is the messaging going out to thousands of prospects a day. They can then craft “inspirational and aspirational” messages using the language of happy customers. This would resonate.
This race to the bottom, dictated by discounting, should stop. Customers are a key part of the solution.
Channel Signal compared product review star ratings (customer satisfaction) between the 2018 holiday season and all of 2018. The Holiday Season star average was 4.39 compared to 4.33 for the rest of the year. When price and quality were added to the mix, the change was minimal.
Our conclusion, discounting does little to change customer satisfaction but as Mr. Powell states, does damage to brands, wholesalers and retailers.