How low will retailers go?

Another pre-Black Friday forecast on RetailWire…this time, on the subject of promotional pricing for holiday 2011. My opinion:

I don’t expect discounting to be sharper this year than in years past, especially if merchants have managed their inventories conservatively. However, they need to be careful that the “price creep” driven by higher commodities prices doesn’t choke off demand. And a lot of the market-share battle is being fought on fronts like free shipping (for web-based or multichannel retailers) and loyalty discounts (like the Target Redcard). By mid-December we will know whether “holding the line” on discounting was a viable strategy or not.

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