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Retailers are slashing prices and bumping online sales — and it could spell their own demise (AMZN) | Markets Insider

Retailers, struggling with souring sales and the looming threat of Amazon, are trying to copy the ecommerce giant by offering steep discounts and focusing on online sales.
That may just spell their own demise, said Keith Jelinek the managing director of Berkeley Research Group’s retail and consumer practice unit.
While it may seem intuitive for retailers to offer promotions and go where the consumer is going, which is online, it will also hurt their profits in the long run, Jelinek said.

“Anytime you increase your promotions, you’re going to hit your operating margins,” Jelinek told Markets Insider. “It’s not going to taste good.”
He has observed retailers offering steeper-than-usual discounts this year in order to sell products and get rid of inventory. Yet retailers are losing money anyway because they are sometimes selling items at a cheaper price than it costs to make.

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Retailers are slashing prices and bumping online sales — and it could spell their own demise (AMZN) | Markets Insider.

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