Brands and retailers are offering discounts to make up for lost sales, which could have negative long term effects on their reputation and value proposition.

WHAT HAPPENED: Brands and retailers are offering deep discounts to move inventory and generate cash, but some companies risk damaging their brand image as a result of discounting too much.

WHY IT MATTERS

  • To avoid creating discount dependent customers, companies should implement more thoughtful and tailored markdown practices instead of sitewide promotions. Implementing specific item-driven promotions, which change weekly, will keep customers visiting a brand’s website more often to find deals. Mansur Gavriel is offering 20% off a specific color each week and Rosie Assoulin is discounting a new product every week. Other companies are offering smaller discounts while marketing less expensive items to move inventory: Jenni Kane is marketing shoes and Ministry of Supply is promoting socks. Taking a selective markdown approach while stores are closed will help brands and retailers maintain their value proposition when stores reopen.