Both consumers and retailers stress the need for price transparency, but whereas retailers are more focused on price sensitivity and demands for consistency across channels, consumers are more concerned when pricing does not align between online and offline. Calibration of paid search strategies on Google becomes paramount for department stores and off-price subsidiaries, especially when discounting comes into play. Department Stores and their adjacent off-price subsidiaries are diverging bidding strategies by modifying brand and/or product terms with the retailer name (e.g. tory burch saks). Some brands have been trying to combat discounting by reducing inventory. Ralph Lauren has recently reduced wholesale distribution, a similar strategy employed by Michael Kors Holdings Ltd., which has given less inventory to department stores, leading to a withdrawal from certain store-wide promotions.

Sale-related bidding is the realm of off-price department store subsidiaries—40 percent of brands examined displayed heavy reliance on brand, product, and sale-modified terms (e.g. michael kors bag discount). Of all off-price brand related terms, 81 percent are reliant on sale modified terms (e.g. outlet, sale, discount, etc.), while department stores are only relying on sale-modified terms for an average of 10 percent out of the total number of terms. Discount bidding strategies can appear in both AdWords or as product listing ads (PLAs), which can drive down brand-specific equity. In doing so, it is projected that these brands will then focus more heavily on driving direct e-commerce sales.

Sale Modified Search

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