Living in the Age of Discounting

The latest survey run by Reuters published last week revealed that a majority of Americans are planning to spend less this year over the holiday season than last year. I can almost see the bumper sale stickers from over-wrought retailers already.

We live in an age of “give-aways”. 50% off at Groupon and sale weekends…..just about every other weekend. Discounting has sunk to unthinkable depths. The other day I bought a 50% off deal at OpenTable the online restaurant reservation website. I paid $15 for the right to dine at a local Italian restaurant for up to $30. When my wife and I went to the restaurant a couple of weeks later we took our own bottle of wine along as well. The restaurant was lovely, the service great and the food authentic. But the real clincher came when we were presented with the dinner bill.........for all of 38 cents! I cannot imagine how that restaurant serves dinner for two along with the customer’s wine for all of $15.38 and hopes to stay open for long.

While such discounting is great for consumers, it is brutal when you are a seller. What are businesses to do in the face of such price-based competition? The answer while relatively straightforward is anything but simple. Companies have to find a way to choose which customers to serve, innovate and offer their chosen customers a unique promise. Whether it is through new and varied choices, more functional products, better service or just plain going the extra mile, businesses have to take their destiny into their own hands.

Whether it is Five Guys Burger (check them out if you haven’t already!) or Pop-Chips, innovative providers are finding their way into our wallets without having to shed prices. Nor are they doing it only by coming up with whiz-bang new technologies like Apple or Amazon.

It requires courage, discipline and fortitude to be an innovator in today’s world. But only the bold will survive the rough waters of today’s discounted world.