In this episode of Add To Cart, we are joined by Jason Pallant, Lecturer at RMIT University and Jessica Pallant from Swinburne University of Technology
Jason and Jessica Pallant are the his and hers of marketing research, a dream team package whose academic take on Ecommerce provides much needed clarity and a fresh perspective. Their recently published paper (aptly titled The NIghtmare Before Christmas) delves into how brands feel about taking on Black Friday, Cyber Monday, Pre-Christmas, the lot. They asked a bunch of retailers to spill the beans on their approaches to the sales in an attempt to work out how to change the race to the bottom for everyone’s benefit. Today, we discuss the key findings from their research, the practical solutions they recommend for retailers who want sales success and we also hear their top tip for standing out during the festive season. If you want to have a look at the research for yourself, you can download The Nightmare Before Christmas from the Add to Cart website.
“We’re not saying don’t offer discounts, what we’re trying to say is be strategic about it right?”
Jason Pallant
Research reveals reluctance and fear from retailers
(Jason) “The majority of what we heard, particularly from your multi-channel, omni-channel retailers or more established brands, it’s almost like this underlying really negative feelings around some of these events. We heard things around reluctance. We heard even fear, right? We heard people talking about, I don’t want to participate, but I feel like I have to. We heard people talk about things like we’ve got ourselves hooked on this discount drug of the bump that I get. If I offer a 70% discount, it feels great because my sales go up, my visits go up, my numbers go up. But three months later, I’ve actually realized I’ve lost a bunch of money. They’ve almost become hooked on that feeling of the numbers, the short-term numbers going up.
I think that was our really big, interesting, overarching theme here is that all these retailers are sort of going into these events being like, well, we have to, everybody’s doing it. But actually if you talk to each other, a lot of people don’t want to be doing this, but we’re competing with each other, trying to one up each other with bigger and bigger sales.
Is that actually good for individual retailers? Is it even good for the industry? Is it good for consumers? I think there’s a real opportunity here to sort of sit back and go, why are we doing this?”
Anti sale strategy
(Jess) “An interesting one we’ve seen is almost the anti Black Friday and the anti-sale strategies, just to try and cut through the noise of, hey, this is 40% off, 50% off, 60% off, going, actually, we’re not participating at all. Because that is a different message that is being sent to consumers. So it’s kind of almost like you’re more likely to pay attention to it because it’s different. So I don’t know if it was last year or a few years ago. So Allbirds actually raised their prices by a dollar and said, here, pay an extra dollar, but we’ll then donate all of that extra proceeds to charity. So it was a way of actively not participating and cutting through with a different message than just, hey, we’re on sale, buy this huge amount as well.
More than top line revenue
(Jason) “I guess it depends on what needle we are trying to move. So a lot of retailers are focusing on top line revenue sales during the period, right? But there’s a whole lot of other stuff going on here around awareness, brand perception. price perception, value perceptions. we’re not saying don’t offer discounts, right? I think what we’re trying to say is be strategic about what you’re doing with it.
So for that example, maybe that doesn’t move the needle on revenue within that immediate time period. But does that create a longer perception of a premium brand? Does it create a perception of a brand that has values that are going to align with customers for a longer term period, right? Because this is the other thing around offering a discount and acquiring those customers at a discount, you’ve now acquired them at that lower price point. How many of those people are actually going to then go on to become full price, repeat purchases later?
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