Three steps to keep deep discounting at retail from alienating your best customers and murdering your brand

NEW YORK, May 22, 2012 /PRNewswire/ -- According to a new analysis by Medallion Retail, a New York-based retail marketing consultancy which counts SEARS, Barnes & Noble, Destination Maternity, and Foot Locker among its clients past and present, deep discounting strategies slash margins, promote customer disloyalty, and lead to severe brand value attrition.

"Things can get a lot uglier before they get better unless retailers take measures immediately," says John Krubski, Medallion's Director of Shopper Intelligence and Planning. "To get a sense of the scale of the damage already done, all you need do is Google '2011 sales up, profits down & retail.'"  Of  99.3 million 'hits' -  a US Census Bureau report states sales among large US retail trade organizations were up over 2010, but  profitability fell off across the category."  [1] The companies affected read like a who's-who of retailing.

The good news, Medallion Retail believes there is still time to turn things around. According to Krubski, here's the "how."

1. Get a fresh baseline assessment of the nature of the connection between your brand and your customers based on the intensity of their connection to your brand's value. The intensity of a customer's loyalty can have a profound effect on the value of the brand – and the willingness to pay more for it. Conventional marketing research pays too little attention to the dimension of consumer intensity. That intensity is key to recovering, restoring, and rebuilding the perceived value of your brand.
2. Learn your shopper's "brand value lexicon." To persuade and motivate under these circumstances you need to speak their language rather than yours. Brand value communications need to be understood on the consumers' terms. There are ways to dimensionalize that lexicon.
3. Stop working against yourself at the point of sale.  If you are investing in building a brand outside the store, it's time to rethink the in-store messaging so that it does not dilute the brand and diminish customer loyalty at the moment of decision. We are entering an era where smart marketers will re-think the whole concept of POS communications; seeing them as not only informational and motivational but also as a vehicle for  creating "Brand-Active Environments" in the store.

For more about Medallion Retail, visit www.medallionretail.com

[1] http://www2.census.gov/econ/qfr/current/qfr_rt.pdf

MEDIA CONTACT
Jennifer Davis
Medallion Retail
212-929-9207
[email protected]

SOURCE Medallion Retail