Marketers cannot discount any deeper, study says

A Mohive product story

Edited by the Marketingweek Marketplace editorial team Jul 23, 2009

A study by Mohive has revealed that nearly six in 10 retail marketers believe they cannot discount any deeper.

The report, which questioned 100 marketing experts working in Britain's biggest retail operations, showed that re-aligning promotions to meet current customer needs has taken its toll.

A discounting point of about 20 per cent was the most popular option for retail marketers questioned in the Mohive study.

More than four in 10 say that this rate represents their average discount over the year so far.

Nearly 16 per cent said they were delivering average discounts of 10 per cent across all their promotions.

A small number (less than four per cent) said that for them, the recession had driven average discounts up to about 40 per cent.

No retail marketer claimed that average discounts were in excess of 40 per cent.

Nearly 60 per cent said they did not think they could discount any more than they have done already; the remainder say they would consider further discounts if necessary.

Frugal spending, carefully targeted at elements that promote a good experience in- store, supported by drivers such as direct marketing or web/social networks (which are stable or growing in importance) over classic ad spend or sponsorship (which seem to be losing appeal) appears to be the emerging model of choice for retail marketers working through these current tough conditions, according to the study.

Lars Unneberg, chief executive officer at Mohive, said: 'The real question for retail marketers in the current climate is: "What more can we do to improve the performance of the product campaigns and promotions our business depends on?"
'While the vast majority taking part in our study seemed to think they had classic external factors such as television advertising, PR or magazine promotions covered, nearly eight in 10 now say that internal issues, such as in-store merchandising or staff's ability to recommend and advise, are of growing importance in an environment where footfall is in general decline.