Retail trends: Giving a ‘sale’ meaning in a new retail world

TRENDAFRiCA September 18, 2014

By Nicki Minchin, head of strategy, Geometry Global Cape Town

It is impossible to watch TV, go to the mall, open your email or even switch on your mobile these days without being tempted by fantastic offers, crazy discounts and hard-to-resist inducements for an immediate ‘buy now and save’ offer.

Sales and bargains have long been part of the consumer landscape as a special occasion to drive engagement but now they’re a permanent feature of our shopping experience. Like social media, sales seem to be ‘always on’ and this represents a deep and far-reaching shift in the economic relationship between consumers and retailers.

In the good old days, ‘sales’ were twice a year and they were highly anticipated. Such was the draw of the famous Harrods January Sale that it could start five days after the other London sales and still have people sleeping the night on the street to be at the front of the queue. In America, the sales phenomenon reached a carefully-orchestrated point of hysteria and pandemonium about ridiculous prices that generated maniacal rushes and lawsuits from litigious shoppers injured in the chaos.

The power of the sale was well understood, and its perceptually limited time-period was a key part of the appeal (the carpet shop opposite my office had a ‘Closing Down Sale’ for 10 years!).

Then in the heady boom times of the 1990’s another form of ‘Sale’ appeared in the form of the outlet store: no longer just a place to buy broken Ginger Snaps from the factory floor but now the  place to buy past-seasoned merchandise from the top designers in the world at cut prices all year round. The permanent Sale had been born giving the entitled generation the opportunity to afford their entitlement as they eschewed  ‘cheap’ for value – after all 50% off a pair of Prada shoes still represented a pricey piece of footwear.

These Sales differed from the ‘pile it high, sell it cheap’ retailers by understanding that the experience was part of the experience. Out-of-town outlet centres appeared like Bicester Village, an hour from London and serviced by two railway stations, which promised a highly emotive shopping day  with over 130 prestigious stores selling highly-prized merchandise at heavily discounted prices, and it has become, according to the International Council for Shopping Centres, the most productive shopping centre in the world.

Discount retailers such as TK Maxx grew from one store in Europe in 1994 to 343 stores in 2012. A certain irony is that their first central London store was on the site formerly occupied by Habitat, the Terence Conran-founded chain which offered affordable designer furniture before IKEA reframed the ‘affordable’ and who put all bar three of their stores into administration in 2011. The retailing future had swamped the past.

The innate desire for a perceived bargain resulted in sale shoppers spending more than non-sale shoppers, and a shift in mind-set from how much was spent to how much had been saved. Our FOMO (fear of missing out) and our competitive nature coupled with an aversion to wasting our time (“I’m here so I better get something”) created a powerful cocktail resulting in an “I can’t believe I only paid xx for this” feeling irrespective of whether you really wanted, never minded needed, “this”.

Sale culture

Today as global economies still stumble along in a post-recession daze, ‘Sales’ are every day and everywhere, not twice a year or in specific outlets. They have become a way of shopping. Are they a result of the same emotive drivers as before or is there something new happening? Put another way, will the permanent Sale disappear when economies regain serious consumer momentum? I don’t think they will go away anytime soon as I believe a new consumer attitude has taken hold. Like our grandparents’ generation, whose frugality was a result of war-time rationing and post-war austerity, there is now a pride in making shrewd choices (even Kate Middleton buys from Bicester Village). Kudos is derived as much from the amount saved as it is from the status of the amount spent.

There is a shift in power from the brand to the consumer, fuelled by the internet which allows the consumer to compare and decide what the value of an item is and consequently what they are prepared to pay for it. Market forces and not the marketers are setting the prices now.

I don’t think the emotional attachment and pleasure we get from a bargain will ever disappear – it is human nature to get a rush from getting one up – but not at the cost of feeling that we are being ripped off the rest of the time.

The new landscape will be populated with more honesty and mutual benefice (including paying more for FairTrade principles). Brands and retailers that consistently offer good value (which doesn’t just mean cheap prices) will succeed in the long run.

Digital offerings will deliver price and a hassle-free shopping experience (but for some at the cost of the experience) and two-tier retail platforms make sense – pay less for old technology, last year’s fashions and eating in restaurants off-season but pay top dollar for the new, the exquisite and the rare.  There will still be a waiting list for a Hermes Birkin bag but that offer needs to part of a clearly understood and well communicated retail ecosystem.

In this new world, the thrill of the bargain will remain a constant motivator but massive price-chasing might abate a little bit to create a more stable environment and return us to the time when a Sale was a thrilling event rather than an everyday expectation from a highly skeptical consumer.

Source: Nicki Minchin is joint head of strategy at activation agency Geometry Global Cape Town. She has more than 20 years of experience in advertising and communication, including London, Johannesburg and Cape Town. She owned her own retail enterprises, which has added to her in-depth knowledge of shopper marketing, and is also a confirmed shopaholic who is incapable of walking past a sale sign!


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