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Is discounting bad for business? Furniture retailer eliminates sales

 

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Aggressive discounting is a fact of life for many Australian retailers. Faced with an extremely competitive landscape, which is only getting tougher as more international players enter the market, and consumers habituated to getting a deal, many retailers remain wedded to their deep discounting strategies.

However, discounting isn’t always the answer. In fact when Amazon finally opens its Australian arm, many local retailers will be unable to compete on price and will need to offer something more, whether that’s a unique product range or an amazing in-store experience.

Furniture retailer Freedom is attempting to future-proof its business and protect against the rapidly changing retail environment by ending sales altogether.

The retailer has permanently reduced prices on more than 5,000 products across its range as the first step in its ‘Everyday Value Promise’ customer-centric strategy.

This is an interesting move for a furniture retailer, a category known for high-low pricing and promotions. In a statement, the brand said its price drop strategy will give consumers a sense of stability, making them better informed shoppers who know they are getting the best price.

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Feedback from Freedom customers showed they were frustrated by the industry’s constant promotions cycle; annoyed about waiting for an item to go on sale; hated making a purchase only to find the item on sale the day or week after; and struggled to understand what constitutes a fair price.

Freedom managing director Tim Schaafsma said the brand recognised consumers could be annoyed by the shopping experience, and so wanted to make a commitment to authenticity in pricing, quality merchandise, and outstanding service.

“They are frustrated when they buy something and it goes on sale the next day, and they are frustrated when they find something they like but feel like they have to wait for it to go on sale,” he said.

“Our Everyday Value Promise is a shift in strategy for Freedom; a move away from sporadic and potentially confusing sales promotions that have defined our category.

“A commitment to everyday prices, combined with our stylish, quality products and outstanding service, benefits consumers who will be better informed and more confident when purchasing the furniture and homewares they want.”

 

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