From a supplier and retailer branding point of view, pre-christmas discounting became the norm, bigtime....
A time when the need to move product also served to reduce brands to commodities.
Remembering that consumers buy the total package (Product, Price, Presentation and Place) and shoppers buy the total 'shop' (Products & assortment, Pricing, Promotional activities, Place i.e. store location, Personnel, Physical distribution & handling, Presentation of stores & products, and Productivity) it is obvious that price figures highly in each case. However, it can be seen that the retail offering is more complex, and by excessively discounting, given the knife-edge margins, there is simply little scope for permanently reducing prices, without damaging the fabric of the business.
The impact of this will become more obvious tn the new year, when the next quarterly rents become due…
Meanwhile, permanent discounting of brands merely serve to commodify the category, with little benefit for anyone
Again, the new year will allow brand owners to demonstrate their need to rebuild brand equity via direct ATL re-investment, whatever the cost to the diminishing pool of retail trade partners…
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