Sweeten christmas sales with discounts

When it comes to luring shoppers this Christmas, there are a few sure fire ways to get it right. Here are tips from the experts on how to have a bumper season.

Christmas shopping

Business is tight but the decision as to whether you discount your goods and services to snare some market share can be far-reaching.

Whether your business is online, or a traditional bricks and mortar retailer, you have to weigh up the pros and cons.

Some might choose to do a level of discounting through loss leaders - a range of goods that they don't make any money on but drives people to their store to potentially buy other full-priced items.

Another option is to stick to your guns, not discount but woo and retain customers through fantastic service and other incentives. How well you manage the expectation of consumers, fuelled by the ease of online price comparisons, will be the key.

LOSS LEADERS

Business Development Company operations manager Jack Sakalis says many businesses are opting for loss leaders to get customers through the door.

But, as Sakalis warns, it must be a genuine discount as empowered consumers are a wake up to fakes.

"People know if it is a genuine discount. You can't play funny buggers with it because if it is not real you lose a lot of respect," he says.

Sakalis says the two big supermarket chains have the loss leader principle down pat.

"They have their Coca-Cola at the end of the aisle and then people go in and they don't just buy the drink. They normally walk out with a basket of 10 or 12 items," he says.

Sakalis says while the big supermarkets might be able to sell their chicken cheaper and take a loss, the small shop in the same fresh food hall will have to sell it for a higher price to keep their doors open.

Australian Retailers Association executive director Russell Zimmerman says many businesses believe success is not all about price.

ADDING VALUE

If you can't or don't want to compete on price, you need to be able offer your customers something else.

Sakalis says in the case of the chicken seller, they need to push freshness, great customer service and advice.

"If you buy it at the chicken shop you can ask for the skin to be trimmed off. You can't do that at the supermarket."

He says the smaller shop needs to get its message right and if it does it will be able to sell its chicken at the higher price.

Zimmerman says add-ons can be tangible and intangible.

"If someone comes in and buys a dress, you might give them a matching necklace or nail polish," he says.

Some clothes businesses offer wardrobe styling rather than discount. Some businesses use loyalty programs.

"Service is one of the most intangible things you can give away. Sometimes the price becomes irrelevant if you have the little add ons such as gift wrapping or free postage. It just adds to the whole box and dice," Zimmerman says.

PREMIUM VS BUDGET

Sakalis says people often follow a brand and their decision might not be price sensitive.

Cosmetic brands, for example, often have a huge and loyal following. He says while some people go for the cheapest price, others will be more interested in quality over quantity.

Zimmerman says stocking products that other retailers might not be interested in because they are more expensive can be a good option.