Discount sites like Groupon, livingsocial, scoupon, doorbuster, catch of the day, and the like are presenting considerable challenges to bricks and mortar retailers. They are often offering brand name products for a fraction of the price the same products can be purchased in a retail business.

How do you compete with this, with the perception being pushed by the discount sites that full price is a thing of the past?

Retailers have been a bit shell-shocked by the success of the discount sites. Some have even joined the sites thinking that this is better than being left behind.

It is time for retailers to step back, take stock and understand their point of difference in the shopper mix.

If you look carefully at the discount sites you soon realize that the success stories are not always as good as they are made out to be.  Indeed, there have been some horror stories for shoppers and products suppliers when engaging with the discount deals sites.

Sure, some of the discount shopper sites offer excellent deals, genuine value. But is this the future of retail?  Will national and international brands only be able to sell through such sites? I suspect not given that the sites take a hefty margin and force those using them to sell their products at a considerable discount.

You can’t build a national or international brand on a discount model from the get go. Brands need to stand for more than price alone to have longevity.

Shoppers learn about products by touching and feeling them. This is where trust is built. Only retail stores can provide this experience.

Retailers can compete with the discount coupon sites by reinforcing the value of the physical shopping experience.  They can do this by:

  • Encouraging active browsing.
  • Placing products in-store adjacent to other products which retailers know sell together – based on data in their Point of Sale software.
  • Hosting in-store events and marketing these to the customer database.
  • Rewarding shoppers for frequency of visit and purchase.
  • Using technology in good Point of Sale software to ensure that sales associates share valuable additional information that separates the store experience from the online experience.
  • Using gift vouchers to allow shopping in-store to be sold as a gift where you are not sure what to give.
  • Using smart packaging of items into ‘hampers’ or ‘gift packages’ to create a ‘product’ which is unique to your business.  Good point of Sale software will make this easy to do, track and manage.

While competing with the online discount sites on price is a challenge, there are ways to do this that uphold the points of difference of the in-store retail experience.

The ideas in this article are just a start.  Central to such a project is using Point of Sale software beyond it being a glorified cash register and making the most of the opportunity to drive shopper loyalty.

Shopper loyalty is tremendously valuable. It is nurtured through the retail experience through knowledge, service and pricing. These three elements combine to deliver excellent business value and a platform off of which a bricks and mortar retail business can compete with the discount coupon sites.