Careful With That Axe...

by Angelika Kazakaitis - Planner, Consumer Insights

Retailers are drastically slashing prices to move more products out of stores. Just last year, brands such as Saks Fifth Avenue, Nordstrom, Zale, and Gap were already offering discounts to dig deeper into consumers’ pockets. Pottery Barn even offered discounts up to 75% and the slashing continues.

While sales are appealing to consumers, especially in this economy, brands should be careful about their marketing initiatives. If you start giving away your products consistently at a discounted price, a brand can start to look cheap, and have a hard time overcoming price perception issues in the longer term. There are still ways to offer value without big price cuts.

Source: D'Innocenzio, Anne. "Slashing Prices A Risk for Retailers." Ajc. 4 Sept. 2008. Associated Press. 18 June 2009.