Getting retail right: Shifting away from discount strategies and bad habits

DDB Sydney managing director Priya Patel considers why retailers need to move away from the discount strategies and bad habits that have ultimately damaged their business model.

When the retail sector is pitted against banks, airlines and even burger restaurants, it’s not hard to feel like they’re missing a few tricks. Having led the Marks and Spencer’s account for five years in the UK, there was a lot about the retail sector that I loved, from the fast pace to the high volume and crazy mix of food and fashion. However, I didn’t love that too often ‘retail’ was reduced to price-led shouting.

Other categories have come on leaps and bounds in terms of introducing meaningful behavioural change mechanics into both their communications and operations. Yes, there are offers and discounting strategies, but they are not the premise of their business model or their entire consumer experience.

By thinking about irrational human beings first and foremost, focusing on the highly emotional path to purchase and delivering their offer with simplicity and fluency; most other categories have facilitated behaviour that makes them genuinely useful. I can check my bank balance on my phone. I can pick an aisle seat on a flight. I can build the car of my dreams before even entering a show room.

Few big retailers seem to have applied that same ‘human-first’ thinking and instead seem to resort to a never-ending barrage of short-term discounts. This seems particularly odd when shopping is such a personal and emotional decision and should be so intuitive and easy. So, what might a human-first approach to the retail category look like?

Firstly, make me feel good.

Yes, shopping is mostly an irrational drive towards meaningless accumulation. Yes, it is a short term high. But, arguably, all forms of happiness are fleeting and there is a fundamental and inexplicable satisfaction that comes from bagging a new frock or putting on a new crisp shirt. It is real and it should be celebrated.

We’ll happily acknowledge the pleasure of a first burger bite or the joy of driving a powerful car down a windy road, so why not the unadulterated euphoria of buying something you love?

Show me some expertise.

Curate. Tell me what I should buy. Give me a point of view instead of providing everything under the sun or exactly the same SKUs I can buy in a standalone store up the road. Retailers can learn from how media companies, such as Netflix and Stan, categorise, curate and make recommendations on people’s preferences on their platforms, rather than presenting them with every show available.

For department stores, the ability to stock interesting, differentiated, smaller or upcoming brands and make them available at scale feels like an easy win.

Basically, if you’re asking me to spend, help me make it choiceful.

Focus on the experience.

The digital experience needs to work fluently.

Just as a car configurator can help me build my car before I head to the showroom; retailers have huge opportunities in incorporating quality videos. Make it easy to see the fit, colour, fabric and ideally how it looks on a vaguely realistic model i.e. the things I could judge if it was physically in front of me.

While the digital experience is important, the physical space is where people can actually touch, talk and try. So, invest in staff and make them experts. People want someone to tell them what bra size they are or to find a bigger size when they are half naked in a changing room.

It’s not dissimilar to investing and training a quality air hostess – the one who always manages to stow your bag in an implausibly small overhead compartment or fetch you the extra G&T. There is a value to this human interaction that goes beyond money.

Be consistent.

When you go on sale every other day, it makes me question the value of what I bought at full price. In fact, it fundamentally erodes that value. Unless you want your entire position in market to be ‘cheap’, look for better ways to clear stock.

For big retailers with large existing consumer bases, 1:1 discounts seem like a good place to start. They reward me and make me feel special, but are essentially a discrete method for discounting i.e. without painting the whole store bargain basement red.

Do the hard work for me.

Quality and ethics are the new normal.

Look at how fast food chains constantly interrogate and upgrade their supply chains or the speed with which car manufacturers are standardising hybrid models.

Most people don’t want to buy crap stuff that falls apart and destroys the planet. That doesn’t mean no basic or cheaper options, but it does mean consistently raising standards and making even basics brilliant.

It feels like big retailers have all the right ingredients for success; purchasing power and distribution networks, talented and trainable workforces, deep enough pockets to drive structural change and national reputations and fame. They just need to take this amazing framework and make each and every interaction feel more human, more intuitive and more consistent.

Priya Patel is DDB Sydney’s managing director.


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.