Price cutting will lead to failure

Price discounting will not be enough to succeed in another challenging year for retailers.

John Lewis’s record Christmas sales show that offering value, rather than discounting, will be retailers’ saviour in 2012 (‘Marketers stress importance of offering value in 2012’).

If high street retailers rely on discount-only strategies, they will leave themselves open to attacks from pure play online retailers that, due to lower overheads, will often win a price war. High street retailers must offer customers something they cannot get online.

Customer service and the consumer’s experience are vital components of value, which companies should focus on this year. If businesses get this right and demonstrate the value they offer to consumers, they could be the ones bucking the trend in 2012.

Sarah Buckle
Client services director
Leapfrog Research and Planning

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