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How can brands maintain profitability in perma-discount era?

Value-centric strategies can boost customer satisfaction without constant markdowns.

Brands must maintain profitability and brand image whilst meeting consumer expectations in today's retail landscape filled with promotions and sales, as per WGSN’s Retail Forecast 2025.

According to the report, leading with value-centric initiatives allows brands to enhance customer satisfaction without resorting to constant markdowns.

Introducing perks such as free expedited shipping, bundled deals, referral discounts, and post-purchase rewards will enhance customer satisfaction and loyalty.

"Optimise the shopper journey and provide excellent service to increase sales in a way that's less reliant on discounting," the report noted.

Implementing loyalty programs that consistently deliver rewards can also help break the cycle of waiting for sales periods.

Take, for example, Best Buy's price-matching policy reassures customers of getting the best deal, even after purchase. Retailers like Freitag and IKEA also experiment with non-discount strategies during traditionally heavy discount periods, fostering customer engagement without relying solely on price cuts. 

The report noted that constant discounting not only sets consumer expectations but also erodes brand equity and profitability. 

It said brands must be deliberate in their approach to sales, avoiding over-reliance on markdowns and instead focusing on occasional, impactful promotions. 

Additionally, infrequent release of coupons and discount codes prevents customers from becoming desensitised to discounts. Holding once-yearly, direct-to-consumer sales and integrating personalised promotions into marketing strategies maintains brand integrity. 

Moreover, flash sales create urgency and exclusivity, sparingly used to prevent sales fatigue.

For instance, MatchesFashion's year-round outlet feature preserves brand reputation whilst also offloading inventory. Grey Bandit adjusts retail prices to accommodate future discounts, safeguarding margins. Maison Miru focuses on seasonless offerings and full-price core bestsellers, minimising the need for discounting. 

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