I have spent a considerable amount of time on shopping apps lately. In addition to looking for fall pieces to invest in for myself, I’ve also started shopping for holiday gifts. And the one pattern that has emerged across the market from week to week is that brands as diverse as CB2, Macy’s, and even Bergdorf Goodman are constantly on sale. Whether it is a “Friends and Family” event, an “Archive” sale, or a gift card promotion, retail’s over-inventory problem has slipped into an endless sale cycle.
That cycle is set to hit overdrive as retailers get caught up in Black Friday markdowns and holiday promotions. But constant discounting eats away at brand equity—the valuable recognition, trust and perceived value a company builds up over years. Constant markdowns train the consumer to never buy at full price. When a store offers promotions every week, it becomes a psychological question for shoppers: why should they shop without an incentive? But for brands, taking unplanned markdowns means shrinking seasonal margins and hollowing out your profits. Below are a few ideas for how independent brands can navigate promotional pressure while preserving their brand value.
Better Up-Front Planning. Marketing cannot fix a poorly designed product that doesn’t sell or a solid product that has been over produced. The most effective way to avoid markdowns is small-batch production runs. Producing fewer units creates natural scarcity, drives full-price urgency, and eliminates the need for massive end-of-season discounts.
Protect Core Styles. Emerging brands rarely have the leverage to force major wholesale stockists to adhere to a markdown schedule or the cash flow for an end-of-season inventory buyback. Instead, protect your brand equity through product allocation. Keep your evergreen hero pieces a DTC-exclusive, offering wholesale partners only seasonal colorways or limited capsules. When third-party retailers inevitably launch seasonal markdowns, your core products remain protected at full price on your own site.
Bring Back the Biannual Sale. In the 1990s, luxury houses only had two sales periods a year: January and July. Stepping away from the noisy, crowded promotional calendar of November and December prevents your brand from competing on price. Sticking to two dedicated sales periods a year prolongs your full-price selling period and reinforces product value.
Offer Gated VIP Access. When markdowns are necessary to clear seasonal inventory, treat them as a high-touch gesture for your most loyal clients. Brands like Cuyana do this well by offering subscribers private sale access before opening it up to the general public. Gating promotions turns a markdown into a reward for your best clients.
Value Additions Instead of Price Cuts. If you must participate in Black Friday and holiday promotions, offer value rather than just slashing prices. Instead of taking 20% or 30% off the retail price during November, offer incentives like a gift with purchase (a high-margin leather cardholder with purchases over a certain amount), complimentary personalization such as free monogramming or holiday gift wrapping, or a future credit offer like a $50 gift voucher toward a next season full-price purchase.
Image courtesy of Shutter Speed / Unsplash.
