Hefty, round-the-year discounts will spell doom for retailers in the long run: Piyush Adesara

If there is one thing that we see rampantly happening during the festive season, it is retailers across the country fighting it out in a race of discounts. Irrespective of their size — from a corporate jeweller to a small one, every jeweller comes up with special and hefty discounts to attract maximum sales during this period.

Most jewellers do it because they feel it’s what everyone is doing and they don’t want to lose out on an opportunity. Discounts are also the easiest to offer before the start of any festivity, be it Akshaya Tritiya, Navratri, or Diwali. However, as a jeweller, I feel it’s a wrong trend and does not do any good for the industry. It may help the jeweller or businesses for a short period, however, affects their credibility in the long run. I feel jewellers do not need discounted prices to increase customer conversions, especially during the festive period. Discount is not the gold standard or thumb rule of the retail business. Fighting over prices won’t benefit anyone and, thus, is not a very good business practice to adopt. It makes customers feel that jewellery cannot be bought without discounts.

We cater to the luxury category and discounts only diminish the luxury quotient of the jeweller. Regular discounts affect the brand image and the customers end up losing faith in the jeweller. Their perception changes for a bad practice — they only visit jewellery stores during the festive season to avail of the discounts, which is bad for the entire industry.

This is not to say that I am completely against discounts. However, it should be done once or twice a year. I urge retailers across the country to come up with creative campaigns and new ideas to attract customers instead of hefty discount schemes. They should try to incentivize customers through lifetime free maintenance, loyalty points, etc, so that they feel special. The jeweller can also come up with new collections in lightweight gold jewellery, which suits the customer’s budget and give them some relief from the gold price hike.

The goal should be to provide value. Discounts can only pull a good customer once, but if the focus of is to make them permanent, it is quality and the after-sales services that will sustain them.

I feel that the industry leaders from every city or town should make sure that they set a good precedent by not giving out unnecessary discounts. If they follow the no-discount policy seriously, others will follow suit. There is a difference between promotions and discounts. Promotions increase the value of a product, but discounts decrease it. Talking from the customer’s point of view, eventually they see through a jeweller who offers discounts throughout the year. The customer then begins questioning the product quality and suspects that they are below par.

Discounts financially affect a jeweller as they decrease profit margins. Giving out discounts is as good as training a customer to wait for them. An ideal customer is someone who will only ask for a discount after finalizing a piece of jewellery. A non-ideal one will first enquire about discounts and then compare your prices with the other stores. So, it is up to jewellers to decide who they want in the long run. Too many discount schemes never attract an ideal customer. The festive season is a busy time, and jewellers should show a sense of urgency. They should limit the discount period and make customers feel how they are losing out on an opportunity with limited period offers.

Courtesy: Retail Jeweller India News