Can discounting have a negative impact?
Posted on in Business News , Cycles News
Loyalty write how discounting as a means of increasing customer retention has negative impacts on customer loyalty.
Surprising?
Stores like Debenhams, New Look and Topshop played the last couple of months of 2018 aggressively with discounts of up 75% on products. And yes, these forceful measures led to £7 billion sales in November, but, £2.4 billion worth of products were returned.
Discounting seems to be the most popular idea to increase sales as the numbers, even today and in the past, have suggested that discounts attract more customers and result in increased purchases. However, discounts are also directly correlated to the increase in products returned. Although that may not seem like a huge draw back to implementing discounts, the loss in consumer trust is.
Roni Cohen, Director of Data Science at Optimove, says:
"Our data show that discounting above 30 percent has a negative impact on customer retention".
More and more companies and retailers are talking about the consumer and how, as the retail market evolves more and more, we are finding that the consumer sits at the epicentre of the market space.
Put the consumer at the heart of your business and personalise your business to suite them.
If you're interested in learning more about the loyalty side of the retail market click here, and read all about the coming-soon, three-in-one app, booost.
