Fashion retailers in Australia are simply devaluing their brands with a seemingly unrelenting reliance on price discounting. In Melbourne we have not yet officially hit winter but many of our fashion retailers are hitting the ‘sale’ panic button. In the past week I have had the pleasure of purchasing jeans and pullover from Saba at a 30% discount. This discount was not simply available on those two items, it was available on all menswear items. The interesting thing is that I went to store specifically to get the items, not knowing the sale was on. I am a loyal customer, the very thing that brand equity is based on. They traded off 30% in gross profit margin and did nothing to make me think that I had specifically been rewarded for my loyalty – as it was a discount available to all.
And they are not alone. Country Road are offering a mere 25% off everything today and tomorrow.
While it may serve to feed the sales pipeline it unfortunately also reinforces the diminished value equation so many fashion brand retailers currently represent. Most fashion shoppers feel rather reluctant to purchase any item at the full recommended retail price. Why would you when if you wait a few weeks into a new season you can step up to a 25-30% discount. The re-occurring cycle of across the board discounts communicates only that the retailers in question are operating with inflated margins or absolutely wacko business models. What ever the driver it simply serves to inform the consumer that the brand only represents value with a hefty discount.
There has to be a better model. This is particularly the case for fashion brands who operate their own retail outlets and hence get to control their distribution and destiny. At the very least, let’s call a halt to across the board discounts. The challenge is to find a solution that works for the business and the brand. New fashion entrant to Australia, Zara, at least moves to the beat of its own drum. With small volumes of inventory and rapid changes in fashion items/styles (every 6-8 weeks) they create an inherent urgency in customers to act – or miss out. Attractive pricing always, combined with average quality products adds up to great value for those who simply wish to have on- trend fashion pieces for the current season (not for a life-time or the moths).
It truly is time for some fresh thinking.
Peter Singline
Brand Scientist
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Tags: Australia, Brand Agency, Brand Design, Brand Experience, Brand Strategy, brand-logo, brand-scientist, communicate-offer-to-the-market, Corporate Image, country-road, Fashion-retailers-Australia, fashion-shoppers, Graphic Design Melbourne, Interior Design, peter-singline, Truly Deeply, winter-sale
But maybe if Australian clothes weren’t so overpriced to begin with there wouldn’t be such the need to discount so heavily so often. Admittedly a large part of it is tariffs/taxes but let’s look at the whole system. A business shirt I can buy in the US for $25 shouldn’t cost three to four times that here…
Thanks for the post Pete. I am always surprised at how big retailers forget, or are to married to traditional systems that they don’t use new, creative approaches to drive sales or build brand loyalty. And then cry foul when the game changes and customer buying habits shift.
They could benefit from some fresh creative thinking like you have presented in this post.