Premium brands market themselves on a promise of exclusivity and unique experiences in exchange for charging a significantly higher price. Discounts, especially sizable ones, rarely happen for these brands. As global supermarket chain Aldi just learned from a recent promotion in Australia, such discounts can create both excitement and disappointment among its customer base.
WAtoday’s Executive Style column discussed how an online promotion by Aldi turned ugly fast. The chain offered Johnnie Walker’s Blue Label King George V special edition for $399 a bottle, a $200 discount.
The heavily discounted crystal decanter of the premium beverage turned out to have a lot of appeal – much more appeal than Aldi may have anticipated. Limited quantities available at the reduced price tag quickly vanished, leaving disappointed customers who missed out on the deal in its wake. Aldi told Executive Style they sold over one hundred bottles at the discount price. After that, stocks dried up.
Those customers began venting their frustration on Twitter and elsewhere, resulting in a brief storm of negative publicity for the chain. Word of mouth communication, so valued when positive for marketers, became a detraction for the brand.
Offering a discount represents one of many strategies online sellers can use in order to motivate buyers to make a purchase. Discounts in general helped the 2013 holiday season see a 3.5 percent rise in US retail sales.
However, ecommerce pros who hope to spur sales of premium items with a sharp reduction in price could find themselves in Aldi’s situation all too quickly. Premium items that aren’t normally discounted so deeply could experience similar demands, rapidly exceeding supply.
Sites such as Woot, the discount seller owned by Amazon.com, specialize in the limited-time, reduced price offer. Woot makes it clear up front that sales only last as long as an item is in stock. The expectation of possibly missing out is built into the experience. It’s a lesson Aldi and others might want to emulate for future promotions.
