Discounts are not enough to attract customers – shopping must become a more enjoyable experience, writes Alanna Gallagher

HOW LOW can you go? Despite discounts of up to 70 per cent on goods in the new year sales, consumers have tuned out and are holding onto their money. Andy Bond, chief executive of British multiple Asda, recently announced that retailers are at risk of “wrecking” their businesses unless they act strategically.

Price discounting means that people now expect huge discounts when shopping, says Dr David Lewis, author of The Soul of the New Consumer and managing director of British-based The Mind Lab.

While discounting is great for the customer, mid to high-end retailers need to add value to shore up financial survival in 2009, argues David Ringer, general manager, The Continuity Company (TCC) in Britain and Ireland, whose clients include Superquinn and Tesco Ireland.

“Value is working harder on service, price, experience and on creating a compelling reason to cross the threshold,” he explains. Retailers need to stick to brand values and principles, he adds. “This shouldn’t be disregarded in the hunt for sales.”

Deep discounting is not sustainable in the long term, Ringer continues. “To survive, retailers need to look at other ways to attract shoppers.”

Offering consumers a soft benefit can achieve a disproportionate uplift in sales. Wedgwood dinner services offered in a loyalty programme to Tesco customers and Villeroy Boch cutlery offered in a loyalty programme to Superquinn customers are tactics that worked for TCC.

“The increase in sales more than pays for the cost of the tangible reward,” he declares.

Superquinn’s roll-back weekends have also increased its number of new shoppers, although clearly not sufficiently to avert the 400 job losses announced this week.

With retail down by 5.6 per cent, according to Retail Ireland, and shopping in the North saving you up to 17 per cent on goods, how do you incentivise the market?

“The retail environment should be exciting and a pleasant place to shop, a place where the consumer is regarded and rewarded,” Ringer maintains.

It’s not just grocery. Shopping is going to have to become a more social activity; otherwise people will just buy online, notes Mary Portas, Harvey Nichols’s former creative director and managing director of Yellow Door Creative Consulting, who also fronts BBC2’s Mary Queen of Shops. “The shop environment is going to have to become somewhere the consumer wants to be rather than a space to fit x number of units into.”

Portas believes retail needs an injection of theatre. Her ability to read the market is such that high-street fashion chain A-Wear, which has 30 stores, invited her to Dublin last week to address staff. “I’m here to excite and reinvigorate them,” she explains.

People have relearned the value of goods and services, says Lewis. “They want to buy things that will last and have added value. They are spending but spending cautiously.”

The retail landscape will need to reflect this new and very different mentality. Ian Galvin, chairman of the Mosaic Group, whose stores include Shoe Studio, Warehouse, Karen Millen, Oasis, Principles and Coast, has shifted policy. “It is very important now for customers to feel they’re getting true value,” he observes.

Having addressed the sterling/euro disparity, Mosaic is now tightening stock supply and has readjusted spring/summer prices to maintain a truer picture of the sterling/euro story.

To get customers to part with their money you need a focused product, great service and fair value, says fashion and retail consultant Eddie Shanahan. “It’s a basic retailing principle and we need to get back to that.”