Heavy discounts were normally offered by retailers in the first and last quarters of the year, or from Black Friday until early January.

New research revealed, however, that the desire to stay ahead of the competition, coupled with the need to meet consumers’ expectation of regular sales, drove many businesses to change the norm.

They resorted to put products on sale frequently, which seems to be doing them more harm than good.

53% of 500 British retailers surveyed by eCommerce payments provider Klarna said the ‘always-on’ nature of discounts is taking a toll on their profits. In fact, 11% of them claimed that discounting cost them over £25,000 in the previous year.

Klarna’s report further revealed that eCommerce retailers are the main casualties of heavy discounting, as 56% of retailers said majority of their discounted transactions took place online.

How to avoid habitual sales

Merchants sell their goods at lower prices to dispatch old or excess stock, but there is a better way of doing it.

Luke Griffiths, managing director at Klarna UK, had this to say:

“Instead of discounting, merchants would do well to focus on perfecting the customer journey – from an inspirational browsing experience through to a seamless checkout phase, with multiple payment options and one-click repeat purchase options.”

Besides, who said sales aren’t stressful to consumers? Although 18% of consumers polled admitted that they will only shop if there’s a sale, 28% of them said sales are too stressful so they avoid them altogether.

Here’s what majority of people who shop online and in-store think:

45% of them are more likely to shop if they were sent a personalised offer
25% are less likely to shop with a retailer who always has sales on
38% believe constant sales make a brand look cheap and unfashionable
Klarna also found 36% of customers would rather buy items at regular prices than those that are marked down if they can pay once they have received the goods and decided which ones to keep.
You see, running a sale may be a contributing factor to the success of your business but is not the heart of it.

Discounting is an old practice which triggers consumers to spend more money, but the problem is that it’s now rampant and putting profits on the line. Rather than selling for half the price and earning less than your expected profit margin, employ tried-and-tested methods that will benefit you and your customers.

Here’s a suggestion from Andy Mulcahy, strategy and insight director at IMRG:

“Getting the basics right – selling items that genuinely appeal to the target demographic, optimising areas of the experience, providing leading service – remains the most effective method for increasing sales in a way that is far less reliant on discounting.”

What are your thoughts on price slashing and how often do you do it?

It benefits your company

It goes without saying that your company is your priority in this case; but without satisfied customers, there won’t be a successful company – which means that everything goes hand in hand.

The benefits your business will experience if you invest in an E-Commerce website for it are abundant. First of all, think about how expensive it is to rent out a shop space where your shop is well seen and in a prime area. If you have your shop online, anyone can see it; not only the people who happen to walk past it. This benefit saves you and your business plenty of money. We’re not saying that you should give up having a floor shop altogether, but it certainly saves you from having to rent out something extravagant in an expensive area or shopping center.

Low Operational Costs

To generate an E-Commerce website requires very little capital investment compared to purchasing business premises. The difficulty with ‘physical’ business premises is that there is a need for high visibility and the location will always be a key issue. The design and development of an E-Commerce website can be a comparatively moderate investment relative to a business’s turnover. The potential to save money on personnel as checkout, payments, delivery and all over operational processes can be fully automated in the E-Commerce website.

Convenience & Easiness

E-Commerce becomes one of the preferred ways of shopping as they enjoy they are online in today’s the world, because of its easiness and convenience. They are allowed to buy products or services from their home at any time of day or night.

The best thing about it is buying options that are quick, convenient and user-friendly with the ability to transfer funds online. The consumers can save their lots of time as well as money by searching their products easily and making purchasing online.

Selling Products globally

If you are running a store, it will be bounded to the geographical region for which you can provide service, but on the other hand with an E-Commerce website, you can sell your goods and services globally. Additionally, the remaining limitation of geography has dissolved by m-commerce that is also known as mobile commerce.

Expand Customer Reach

E-Commerce provides new channels for you to reach more customers. Whether you’re just starting out or an existing seller, there are new customers to serve.

Existing brick and mortar sellers can be limited by their location. Customers must travel to visit your store. With E-Commerce, you can sell to customers anywhere, anytime. This allows you to serve customers across or internationally.

Minimal Barriers To Entry

Any new or existing business has the ability to create and run a successful E-Commerce website. The technology is in position for any business to hold the Internet and enjoy the many benefits which E-Commerce offers. As discussed, the costs of running such a business are minimal and the initial investment is moderately low. Many of the barriers which are associated with having a physical business location are removed and a business only has to concentrate its efforts on creating a service which addresses the needs of its customers. At IT companies, we specialize in E-Commerce solutions and would welcome the opportunity to discuss your requirements.

Even more startling: 10% of advice was found to leave investors in an even worse financial position.

Through a “vertically integrated business model”, Commonwealth Bank, National Australia Bank, Westpac, ANZ and AMP offer ‘in house’ financial advice, and collectively, control more than half of Australia’s financial planners.

It’s no surprise ASIC’s review found advisers at these banks favoured financial products that connected to their parent company, with 68% of client’s funds invested in ‘in house’ products as oppose to external products that may have been on the firms list.

Why the banks integrated financial advice model is flawed

It’s hard to believe the banks can keep a straight face and say they can abide by the duty for advisers to act absolutely in the best interests of a client.

Under the integrated financial advice model, there are layers of different fees including adviser fees, platform fees and investment management fees adding up to 2.5-3.5%

The typical breakdown of fees is usually as follows: an adviser charge of 0.8% to 1.1%, a platform fee of between 0.4% and 0.8%, and a managed fund fee of between 0.7% and 2.1%. These fees are not only opaque, but are sufficiently high to limit the ability of the client to quickly earn real rates of return.

Layers of fees placed into the business model used by the banks means there is not necessarily an incentive for the financial advice arm to make a profit, because the profits can be made in the upstream parts of the supply chain through the banks promoting their own products.

This business model, however, is flawed, and cannot survive in a world where people are demanding greater accountability for their investments, increased transparency in relation to fees and increased control over their investments.

It is noteworthy that the truly independent financial advisory firms in Australia that offer separately managed accounts have done everything in their power to avoid using managed funds and keep fee’s competitive.

The banks have refused to admit their integrated approach to advice is fatally flawed. When the Australian Financial Review approached the Financial Services Council (FSC), a peak body that represents the ‘for-profit’ wealth managers, for a defence if the layered fee arrangements, a spokesman said no generalisations could be made.

There are fundamental flaws in the advice model, and it will be interesting to see what the upcoming royal commission into banking will do to change some of the contentious issues surround integrated financial advice.

Many financial commentators are calling for a separation of financial advice attached to banks, with obvious bias and failure to meet the best interests of clients becoming more apparent.

Chris Brycki, CEO of Stockspot, says “investors should receive fair and unbiased financial advice from experts who will act in the best interests of their client. What Australians currently get is product pushing from salespeople who are paid by the banks.”

Brycki is calling for structural reform to fix the problems caused by the dominant market power of the banks to ensure that consumers are protected, advisers are better educated and incentives are aligned.

1. Cost of Living: Some factors, determining, the Cost of Living, include: wages (and wage growth); prices, etc, and how wages, are, or, aren’t able, to keep – up, with the increase in costs, etc! Most realize, we have, in the past – few months, experienced, a huge, jump, in pricing, most – apparent, in the food stores, restaurants, and, nearly, everything, related – to, day – to – day, existence, etc!

2. Federal Reserve: In recent times, the near – historic – low, extended period, of interest rates, has, in addition, to the intended measures (helping businesses, and the economy, in trying – times), has caused a Real Estate, Sellers Market, and, a huge rise, in home prices, in most parts of this country! In addition, it created a surge, in consumer use of credit, because, borrowing, appeared, cheaper! However, most economists forecast, many of these supports, and maintaining, such low rates, will, gradually, be reduced (or minimized), probably, beginning, next year. What impact will that have, and will we see, the historic reaction, which has been, when rates rise, it helps reduce inflation, etc?

3. National economy/ conditions: Largely, because of a world – wide, supply – chain, set of obstacles/ challenged, many industries, have experienced, challenges, in terms of, getting sufficient amounts of needed materials, etc! Go into, nearly, any store, and you will see, more – sparse, shelves, than we have seen, in recent memory! In addition, building supplies, products, food, toys, cars and car parts, etc, are under – stress, because of this!

4. Worldwide economies/ economic conditions: Nearly, every nation, is experiencing, economic issues and challenges! The United Kingdom, because of worldwide, as well as specific national trends/ causes/ conditions, has been largely, impacted! Since, we live, largely, in a global economy, when there is any disruption, in the supply – chain, it affects, everyone!

5. Stock and Bond Markets: Because of several reasons/ factors, the United States Stock Market, has benefited, significantly, and experienced, significant increases, in the price of stocks. In addition to the obvious ones, because, interest rates, have been, so low, many investors, believed, stocks, were, nearly, the only game – in – town! When, if, interest rates, rise, bond rates, will rise, and existing, bond prices, will adjust, and drop!

6. Immediate, intermediate, longer – term ramifications/ impacts: The immediate impact of inflation, is, usually, rising prices, and, wages, which, usually, rise, at a far – lower rate! In the intermediate – period, we begin to see, weakening economic trends, and in the longer – term, depending on how long, it ensues, there are often, several, undesirable ramifications, and impacts!

Don’t take inflation, and its risks, for – granted! The more you know, and understand, the better prepared, you will be!

1. Bond prices and interest rates: The price of a bond, generally, is inversely – related to interest rates! When these rates go down, prices, rise, and when they go up, the inverse occurs! Bonds have, what is known, as, a par – value, which is the price, paid, at the end of the term. Markets usually set these at 100, which represents $1,000 per bond, at maturity. However, during the period, the pricing can rise or fall, which impacts, liquidity – related issues!

2. Mortgage rates: For the last few years, we have been witnessing and experiencing, record – low, mortgage interest rates, which have helped the overall, real estate/ housing market, especially, in terms of, pricing increases! In most areas of this country, we are seeing, home prices, at their highest levels, ever, by a significant, dramatic amount! When this rate, is low, a home buyer is able to buy, more – house – for – his – bucks, because, his monthly payments, are so low! Consider, however, what might be the potential ramifications, and impacts, when these rates, will, inevitably, rise?

3. Consumer credit: Low costs of borrowing, help the automobile industry, in terms of consumer financing, etc! Although, not as much as other vehicles, rates on credit card debt, are lower, and there are often, shorter – term, promotions, offering deals! However, since, most of these are variable, and based, on some index, etc, what happens, when there is an increase, in this?

4. Business borrowing: Another area affected, is business cost of borrowing! Presently, they have had access, to relatively, cheap – money, which helps in reducing the costs of borrowing, overall operations, purchasing inventory, etc. But, what happens, when this, ticks – up?

5. Impacts on stock market prices: For some time, because bonds have paid so little, in terms of dividends, etc, many have considered, the stock market, the only game, in – town! In addition, many corporations, have seemed, better – off, than they probably are, and we have witnessed, a higher, ratio of prices to profits, than in the past! How long will this last? How high can it go?

Many factors impact these issues, especially: actual and/ or, perceived inflation; consumer confidence; politics/ government actions/ the Federal Reserve, etc. The more you know, and understand, hopefully, the better – prepared, you will be!