The retailer’s dilemma: Deep discounts make the holidays less than joyous — Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

MIT Sloan Senior Lecturer Sharmila Chatterjee

From Bloomberg Businessweek

For retailers, this holiday season has been far from merry. Indeed, much of the cheer retailers have managed to generate has gone to consumers.

Retailing has become a multichannel free-for-all. To the brick-and-mortar giants, online retailers are no longer pesky niche players but life-threatening rivals. The online retail space itself has gotten crowded with formidable competitors. Established stores also must compete with each other and local mom-and-pops for the dwindling number of shoppers willing to brave the frequent snowstorms that hit much of the U.S. in this key shopping month. Add the growing threat of mobile platforms, and your average retailer, online or offline, senses danger everywhere.

Consumers are still shaken by the long recession and wary of parting with cash or running up credit card bills. Holiday shoppers this year might have a few more coins to jingle in their pockets, but they have their smartphones there, too. With one click, they can find out how good a deal really is. Retailers have trained customers to wait for the deep discounts, and to get business, retailers have to discount even more.

Read the full post at Bloomberg Businessweek.

Sharmila C. Chatterjee is a Senior Lecturer in Marketing and the Academic Head for the Enterprise Management Track at the MIT Sloan School of Management.

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