Daily deals on the agenda for department stores as retailers suffer worst summer in years

Department stores are taking a leaf from the online retail book, with Myer pledging to discount more after Christmas and promote “daily deals” in stores in order to boost customer confidence and spending during the coldest summer in decades.

The move comes as retail shares have been slammed over the past few days, with Billabong falling 44% after a sharp profit downgrade, along with JB Hi-Fi, which announced a similar profit revision last week.

Analysts believe more downgrades will come in the New Year, especially as more shoppers opt to stay indoors.

Myer chief executive Bernie Brookes told Fairfax the department store will have a large stocktake sale after Christmas, and that it will also launch a new “deal of the day” promotion along with a boost to its online storefront.

”It will give us, we think, the best results ever. We have spent a lot of time throwing it all out and starting again and it will look different, be different and fits in line with what people do with ‘deals of a day’ and add a whole new urgency to it,” Brookes said.

David Jones has also noted its summer stock will be reduced in price.

Telsyte senior research manager Sam Yip told SmartCompany this morning the department stores had likely been inspired by online.

“This is a reaction to what consumers want and what they think is relevant. Up-to-date deals are in demand, and they are just addressing it.”

“Most of the growth in the online space this year has been through discounted deals and products, whether it be through group buying or just normal eCommerce sites. But they all have at least some sort of daily deal clearance, so this is a response to that.”

Other stores have been doing it as well – Starbucks Australia recently ran a promotion where customers could buy a deal each day for a discounted product.

Yip says the assumption among consumers right now is that online is more of a discount channel, and that putting these daily deals into the offline space could be a good move.

“The traditional in-store marketing effort of product placement is being diluted by the need for discounting. So right now, they’re looking for promotions and good pricing.”

“It’s a smart move, because they’ll be getting a lot of foot traffic and they can show off these deals.”

However, more retail analysts are expecting downgrades in the New Year. Yip says there will be more challenges, especially around the discounting of products.

“But these challenges will also be focused on the placement of products in store. They need to give people a reason to shop offline rather than online, and that’s always going to be a challenge.”