Flourish in a Flash: The Discount Debate
Holly Glowaty 0:04
You're listening to the Flourish in a Flash podcast with the Flourish team, Dez, Holly, Kristen, and Erika
Hey everybody and welcome to another episode of Flourish in a Flash. You have the entire team today which is very exciting. Me Holly, Dez, Erika and Kristen. Today we want to talk about everyone's favorite topic: discounting. And we want to talk about that and kind of what goes on you know with holiday promotions. We know a lot of people already planned this but are maybe making some last minute tweaks to their in, you know, overall strategy for holiday. But for the most part, we kind of know what we're doing and we want to talk a little bit about discounting because last week, I was lucky enough to be quoted in a Forbes article where they asked the question about, you know, how do retailers view discounting, some discounts and some just flat out don't. They see it as a discount on their brand, versus maybe just, you know, a lower threshold for their customers to get in and buy some of their merchandise or their services.
So we wanted to have a little bit of a debate on, you know, the overall sentiment around discounting, maybe why some brands have to and others don't. And what are some of the, you know, what are maybe some of the perceptions and misperceptions about discounting? So we're excited because this topic has been something we've been discussing a lot lately. And we think it's always timely, but it's just it's, it's an interesting one to think about, because we don't know if there's a right answer for every brand on this one.
Kristen Thiry 1:57
Yeah, I would definitely agree that there's some misconceptions and some different opinions on whether or not to discount and, you know, I can definitely appreciate the viewpoint that certain brands take the stance that they don't want to appear as providing discounts. But I think one of the things that is important to know, and we've talked about this a bit on other podcast, but like how to provide extra value without being perceived as you know, a brand that discounts and there are lots of different interesting strategies and techniques that you can do to kind of get around that and you know, provide that extra value and that extra incentive to consumers, and, you know, to to make that purchase and to provide just that, that extra reason to do so. So, you know, definitely kind of thinking about some of those strategies, but maybe we start with, you know, why you would want to be perceived as this kind of somebody has an opinion on that. We've not really talked about that on the podcast.
Dez Wiercyski 2:58
You know, just to jump in really quick for the positive behind discounting, I think, especially given the time that we're going into right now, consumers expect it. And if there isn't even like a discussion around a sale or something, then your brand may be missed, you know, like, it may not even be considered. Even if what that person ends up buying isn't on sale, it could be the topic of the sale that brings you in. That brings the consumer in. So really, I think by just completely opting out of discounting, you're taking yourself out of the running.
Erika Frey 3:43
In addition to expecting it, I think it's also they're hoping for it you know, like with the holidays coming like people got a lot of presents they gotta buy, they got a lot of ideas they need to come up with and it's almost like having that discount sparks an idea for individual. Like, actually, I could take advantage of that discount, because I can get someone so this that I didn't think about getting them. So it also sparks ideas for individuals. And you know, I know everybody wants to save a buck or two here and there, especially with the holidays around the corner. So I know not only do they expected, I think that a lot of people hope for it too.
Holly Glowaty 4:23
Well, and I think there's two things here that retailers have to consider. Number one, who is your ideal customer? And how are you getting them in? You know, usually there has to be a hook to get someone to try to buy your, your brand, your product, your service. I do think that there's been a lot of brands who built almost a sort of lifestyle around what they're selling. And so people think we sort of build this whole experience. So we shouldn't discount that doesn't detract from what people are going to take away from it. And so I think There's, I almost wonder if the debate is more about how, how do you discount, you know what I mean? Like the frequency with which you do with or when, or just on what products in particular and maybe to what channel. So maybe you discount in bulk or be to be that you can get these sort of corporate clients, and they're going to then bring in more people through those ads, news, but maybe only discounting once or twice a year to the general public. And it becomes a thing they wait for that might be right for your brand. whereas others, you know, I was, I was consulting with JC Penney at the time that they tried to take away all coupons, all discounts, like all at once it was kind of yanked out. And it was really hard because what they did was tried to change consumer behavior all at once. And I think that's sort of what we see as these legacy. brands to created consumer patterns of behaviors of expecting the discount waiting for the coupon waiting for the promotional code. And then thinking that Oh no, if we just change it all, like lower prices, and no one will miss it. Well, no, it's the game. It's the fun of shopping with you if you're beating the system somehow. And if that's what you've trained your customer to do, you can't just like do a 180 and be like, nevermind, those are gone. You know. And I think that's kind of where a lot of this conversation stems from as well. That fear.
Dez Wiercyski 6:34
Well, you hit the nail on the head, Holly with the excitement around, you know, kind of playing the system, almost what I was thinking while you're talking was, it's the thrill of the deal. You know, and maybe it's maybe it's semantics, maybe it's not, but maybe we're not talking about discounting, but what deals are you offering in the form of you know, any sort of bounced back offers or added not necessarily added value because I think that gets into the topic of what behaviors are you driving, like, if we talk promotional code like $20 to come back or free product like free products going to drive brand affinity it's going to drive you know, a positive feeling was a promo code bounce back offers going to get foot traffic or, you know, online traffic back to your store site. But it really yeah, it's it's so much more complicated than to discount or not discount.
Kristen Thiry 7:40
Yeah, and I would actually sort of play devil's advocate a little bit to what you said Holly, like we talked to a brand at the Buyatab Summit if you are called, who said that they do an annual holiday promotion. And it's kind of a support where you said kind of to play. Like if you if you are known for always doing a holiday promotion. People are going to wait and make all of their purchases, one brand actually said, like the majority of their annual spend, I mean, most merchants see this as the majority of their annual spend isn't holiday. But like, for real, like people will wait months to make a purchase of this particular brand, you know, to get that that holiday discount that they offer. And at this point, it's like they can't move away from it. Because they've ingrained that customer behavior so much, that they would lose a good chunk of their customers that it's, it's more advantageous for them to just keep doing it to keep their existing customer base happy than to try to make any modifications this way because they've just built such a strong customer behavior. So expect, you know that discount during the holidays, but you also don't want to be seen as like always providing it either, you know, because then you're building that behavior in a way that maybe doesn't support your end goals and objectives as a brand.
Holly Glowaty 8:54
Right. Well, yeah, and I mean, I totally agree with that. And I think that's what people are of falling into is that everyone waits or, you know, for that discount. And I think that's what a lot of brands are trying to not become because they've seen it happen with the legacy retailers. And so how do you discount without falling into that exact trap? Right. And I think there's, you know, I also wonder, you know, is that to that, and I kind of think about the perception of what a discount shopper is. And I don't know like, I think if a coupon brings somebody in or promo code bring somebody in, that doesn't necessarily mean they're always going to use one. But I think there is this perception that if you give someone on one one, then that's all they're going to, that's how they're going to shop with. It's, it's like you're saying, Kristen, it's when you build that patterning, keep giving those same discounts at that same cadence? It's I don't want to say this, but I do. It's almost a lack of creativity with how you are offering value or deals to people that can really create bad habits in your customer.
Kristen Thiry 10:16
Yeah, I mean, I think there's a lot of ways to add value. And I think that's where it's, it's an important distinction, like, what is the cost versus the value? And I think that's the distinction we need to help brands make. And I think that's the that's the distinction that you know, branded currency can help make too, you know, there's there's a certain perception of like, you know, cost versus value and how do you swing that one way or the other based on the consumers that you're trying to target you know, that your ultimate ideal customer that you're trying to, you know, bring in and you know, acquire or reactivate, you know, and sort of talking about that, as it relates to what type offers are you promoting and marketing out there because I think that's where you get into a sticky situation if you're talking about cost versus value.
Holly Glowaty 11:10
When that brings up a really great point, especially during the holidays, when I get something like a free shipping offer that is incredibly attractive to me, because I don't live where my parents and a lot of my nieces and nephews and everybody live. So I'm shipping a ton of gifts at Christmas. So for me, that's not a discount on the brand. It's not a discount on the product. It's a discount on shipping, which isn't even done by that company's UPS or FedEx. Right. And I mean that that actually offers me a lot of value. And so I think that's a that's a great point. And I think it'd be kind of interesting to talk about some things that we've seen, or some ways that people have kind of delivered value or delivered a deal without it being a straight a discount. So I do think there's a lot of that out there. We just have to look at those opportunities and enter customer in particular. And, you know, and where you can find those value moments.
Kristen Thiry 12:10
Yeah, and I think, you know, the, the free shipping is certainly one I also think, you know, during the holiday time, if you can offer some sort of like gift packaging of some kind I know that doesn't always apply to gift card. Sometimes it's a little bit harder to do, but certainly there are fulfillment vendors out there happy to help you with customized packaging, and we know a few of them if you need some referrals. But um, you know, definitely, it's an interesting thing to think about, you know, that that too, is an extra value. And, you know, yes, there might be an incrementally extra cost to you as a brand to offer that. But if you could offer something like that, sometimes people will even be willing, you know, to pay a slight up charge for that, that option. But if it's something maybe you don't offer the rest of the year, but maybe during the holiday season, you offer that so that they can actually Just make that a more gift double item. Those kinds of things add value as well, I would say also the expedited shipping, you know, for me, obviously, Amazon has ingrained that behavior in me of the two day shipping and like if things don't get here in two days, I'm like, I forget it, nevermind, you know, but, you know, you could offer you know, more expedited shipping, either at at no additional cost or even for free, you know, maybe there's a certain dollar threshold that needs to be met. I think consumers are, you know, receptive to those kind of offers and look for those kind of things, especially for those last minute shoppers, you know, I know I always do so something like that is another good idea.
Holly Glowaty 13:41
But also say that I love a good comeback and see us offer, right? Like, if I've been in shopping for other people, obviously I see value in your brand and whether I am a regular customer of yours or not. Maybe I saw something while I was shopping for someone other than myself. So there's real opportunities. bring someone back in. So that I think there's a ton of value because this person is already spent with you. So encourage them to come back, encourage them to, you know, re engage with your brand. So, it can be, it can be a discount, it can be, you know, your five free dollars, here's a $5 gift card, right? So, you know, there is going to be enough spend, so give them $5 give them promotional value to come back, put an expiration date on it, see if it works, there's no harm, then here's five free dollars. So no, most people do not walk in and just spend the five and there aren't many places where you can just do that anyway. So it'll be it'll feel valuable. It'll feel like money in their pocket. And it's exciting and it creates a positive, you know, feeling in the customer. So I think that's a really good, it's not a discount. It's $5 that you could only spend at your store.
Dez Wiercyski 15:05
Well, in strategically with those types of offers, you can put a date restriction on it. And that can really give you so much data around, you know, what were the benefits that we saw how how did our customer base really react to this specific offer?
Kristen Thiry 15:25
I would agree and I think you know, spend and get offers are similar to to like the bounce back model. And the thing I like about those is if you're the kind of brand who's trying to increase your average order value, you can set that spend and get threshold above what your average order value is to kind of get people up and then increasing that spend. So you know, having things like that to where, you know, maybe it's getting a gift for whoever you're buying for, but then also get a gift for yourself and it kind of creates two customers out of one. That's one of the things we always like to talk about with branded currency is you're not just getting the customer who is going to use that gift card at the end of the day. You're also getting the customer who bought the gift card for that person. And they can raise awareness with that person who bought that gift card who maybe isn't as familiar with your brand. And as spending it as a great way to do that, to engage the person to say, you know, here's a little something for you. Maybe you you don't regularly shop with us, but why not if we're giving you this extra value, so lots of different strategies and approaches there.
Holly Glowaty 16:28
Yeah, one that you just made me think of was, you know, if you really don't want to give any sort of a discount related to your brand in particular, you know, look at the goals you're trying to drive. So let's say it's foot traffic, right, a lot of retailers need to increase foot traffic. So why not give someone a free coffee, you know, at the coffee shop around the corner from you, you know, create these partnerships is a really great opportunity here for you to give someone something they would actually like. You know, if you're doing a lot of holiday shopping, you start to lose energy. Maybe it's a coffee. If you're my mom, it's usually a cookie that will get her in. And she would tell you that look at your customer and understand, you know what would be a nice addition to this experience. And it can be something like that. You know, really simple value adding to your brand, to your experience, it can be a physical item, it can be an offer for an item, you know, that's not yours necessarily. So you know, and that's another creative way to look at this and figure out how to make it better for your customer.
Kristen Thiry 17:43
I like that trying to bring you in with a cookie that would drive me too.
Holly Glowaty 17:48
I like that I need to put it all in my mom but I would totally do that. I love it.
Kristen Thiry 17:57
Any other like promotions that you guys have seen out there that particularly caught your attention or we're interesting. I know we start to see that this time of year and we try to share it amongst the team. I it's a little early I haven't I haven't really seen too many but wanted to see if any of you had seen any.
Erika Frey 18:16
I saw one and you guys are familiar with this, but like the personalization of products. So they allow free personalization you buy a particular product and you get free personalization of that product. And I think that's a great way to kind of get someone's foot in the door of creativity of creating some sort of unique gift that's very personal and touching that you could provide for someone you know, and I and I got excited with the idea because I knew you know, there was obviously a deadline that I had to reach in order to be able to do it but I found that it was a great idea because it like prepared me for to start thinking about the holidays and I just thought it was like a unique gift. I can gift to someone that they they would feel special about because it's only for them.
Kristen Thiry 19:05
Yeah, that's a great point. And actually speaking of personalization reminds me of the article that I definitely were talking about yesterday or day before about Etsy, doing something really interesting. So they launched a new feature where you can like call in to an employee at Etsy, and they will give you gift ideas. So you have to, like, you know, have a conversation with somebody, talk to them about kind of what you're looking for. And they will give you different ideas and they'll send you kind of a curated list of like, here's what I think we'll kind of meet your criteria and is an incentive for doing that they were offering a gift card. So the first however many people to call in and kind of use this new service, got a gift card and I thought that was a really interesting way to do it.
And I think that's something else. Like if you're launching something new or trying a new concept or a new service, you know, using your branded currency, using your gift card, as as sort of a carrot as Well to kind of get people engaged with I get them to understand the value of using a service like that to get them a little bit more ingrained into your brand and into your, you know, into your culture is really interesting. And I think that was something really interesting to see from Etsy and I think actually, uh, they're doing it right now I gotta, I gotta go make my call get all my customized curated list and my gift card. But yeah, I thought that was a an interesting thing to kind of come up in the news recently.
Holly Glowaty 20:30
So there's a lot of ideas out there. That's what's so exciting about this. And so it is a bit more about, you know, Dez said it first she said it so well. It's the difference between a discount and helping people understand what a deal or value is, and I you know, and if you can change your perspective on this, and if you can change the way we traditionally seen things happen, I think you'll see the customer just wants to feel appreciated. This kind of goes back to that list. The conversation we have all the time where it's like, how do you say thank you to your customer how to create value for them. And it doesn't need to be formal or uniform. You know, it just needs to be something they actually want, not just something you think you can give, and it needs to be, you know, more thoughtful, and I don't think the market is saying, Oh, don't give me something other than a 10% discount, and people are open to something different for sure. All right. Well, I think that's it for all of us today. So anything we referenced will of course, you know, putting the show notes or show notes are available, but thanks for checking out tuning into the podcast this week. And if you want to follow up on anything, you know, hit us up on all of our social media channels. We're pretty good at responding or shoot us an email at Hello at flares. con.com.
Holly Glowaty 21:53
Flourish in a Flash is produced by K+H connection, a branded currency consulting firm. You can learn more about the K+H at khconnection.com and you can always find out more about Flourish and the Flourish Conference at flourishcon.com or follow us on all of our socials on Twitter, Facebook and LinkedIn. It's @flourishcon. And on Instagram, it's at flourish_con
Transcribed by https://otter.ai