Devoted to small businesses and those who run them

I am ambivalent about heavy discounting for both online and offline transactions.

As a consumer, I love to get a bargain or a good deal. But, I wonder what the long term implications are, especially for bricks and mortar small business owners and consumers.

Heavy discounting is the realm of the department stores and shopping clubs. Discount online shopping is big too. Online I don't seem to feel the same loyalty to the business. Online shopping, for me comes down to price and discounts. How about you?

Implications For Small Business Owners
Independent business owners usually know their product and offer personalized service. There is a significant time and staffing cost involved in this.

Point of Difference
But with smaller margins than large enterprises or largely automated online giants, these extras are often the small business's point of difference. Not only is it their Unique Value Proposition (UVP), but it is their lifeline. 

Competing On Cost
Even so, heavy discounts often lure the customer, even usually loyal ones away from the small business, whether online or offline. This may be temporary, or intermittent.

The small business cannot compete purely on cost. Large enterprises can usually negotiate better discounts on bulk orders.  The often outsource  tasks or can  streamline them with high end automated systems.

Loss Leaders
Then there is the bane of every small business retailer's life... the loss leader. Large enterprises offer some high profile products such as the latest best seller fiction at a price less than they buy them for. The aim is to attract customers into the store to buy other high ticket items. This is true in the main street store or online.

Implications For Consumers
I wonder if long term, the consumer is missing out. Sure, we get the short term deep discount and we're happy. But, the more we rely on the cheapest price as our long term criteria, the more independent small businesses shut their doors because they can't compete. 

Long term this limits competition, our choices and sense of personal connection. I'm a fan of independent stores, and try to shop local when I can, just to support them.

What Are Your Thoughts? 

• What do you think about heavy discounting? Do you always go for the cheapest price? Are there times when you've willingly paid a higher price? Why?