How Do You Feel About Discounts?

An article at Jim Logan got me thinking about the traditional retail industry. I noticed in the paper today that our competitors are offering special discounts and I got a flyer in the mail from Macy's (Meier and Frank) about a sale and on the radio was a sale for Gold Toe socks at Fred Meyer. I know that people wait until just before Christmas to shop because of the discounts.

What Jim Logan suggests in When You Can't Think Of Anything To Offer, Offer A Discount. Not. is don't offer a discount but an addition. He offers the opinion that if you automatically offer a discount of 20% you are saying, in effect, your product is over priced. Instead he suggests offering something free in addition to the customer purchase or savings of some percent on an additional purchase. He says

Instead of offering a discount, offer a bonus or premium to attract buyers. Offer something for free – a complimentary product or service, ticket, registration, subscription, etc. Partner with others in your or related markets and giveaway other products or services as a bonus for buying from you. People love getting things for free. Free continues to be the most compelling offer of them all.

What do you think? Assuming the offer has high value to begin with; would you rather receive a free bonus or a discount?

Bev & Mike
Landfair Furniture + Design Gallery

discounts economics retail