Holiday Markdown Strategy 2019

The holiday season has historically been a lucrative period for retailers. From Black Friday to the Christmas sale, retailers spend months in advance to prepare the right marketing tactics to leverage on these events. In this report, find out what was the performance of the holidays sale on the high-street, what discount ranges were most popular, key promotional offers and more.

Written by Ashley LooiJanuary 16, 2020

Introduction

According to the National Retail Federation, an all-time high of 189.6 million US consumers shopped from Thanksgiving Day through Cyber Monday this year,  a 14% hike from last year’s 165.8 million. The digital Black Friday sales in the US hit an impressive 7.4 billion USD this year, second only to last year’s Cyber Monday.

Despite being a traditional post-Thanksgiving sale in the US, other countries have taken part in Black Friday. The volume of transactions was up 7.2% year-on-year in Britain, which saw a 16.5% increase in the value of Black Friday sales compared to 2018.

In this report, we analysed 5 of the biggest fast fashion retailers across UK and US to learn about their discounting strategies during the holiday season.

More than 321,000 data points were tracked from November to December on Asos, Revolve, Fashion Nova, Boohoo and Missguided.

All data used in this report comes from products retailing online as tracked by Omnilytics, unless otherwise mentioned.

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Holiday Markdown Overview

Before diving into the two main discounting events of the holiday, namely Black Friday Weekend and Christmas Sale, we studied the overall retail performance in November and December.

Asos performed the best with good sell-out rate at 44%, having surpassed the average sell-out of 39%. This was achieved with 63% of discounted products and minimal 12% first-time discounted products.

Missguided and Boohoo had aggressive markdowns throughout the holiday season with more than 98% discounted items of total assortments. This proved to drive sales for Missguided as its total sell-out rate was the highest at 47%. Most retailers offered less than 20% of their assortment on first-time discount during the period, except Missguided.

Total sell-out began to rise steadily as early as in the week of Nov 8, which mirrored first-time discount launched movement, and reached its peak over Black Friday weekend. A steep decline in sell-out followed after, before it gradually increased again towards the Christmas weekend.

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Black Friday Weekend

All five retailers decreased the number of SKUs on first-time discount towards the end of Black Friday weekend. The retailers leaned towards offering further markdown on existing sale products instead of introducing new discounted products.

The most common discount range during Black Friday weekend was 50-59% with Asos and Missguided leading the pack.

Asos performed well overall by achieving a higher sell-out rate than the other retailers in the 10-49% and 80-89% discount ranges. Fashion Nova succeeded in driving exceptionally high sell-out in the 50-79% discount range. The rest of the retailers had sell-out rates at below 10% for all discount ranges.

Black Friday weekend typically ends on Cyber Monday with a fresh set of offers but was that not the case for all retailers. Boohoo and Revolve were the only fast fashion retailers that had separate offers. Boohoo scaled down on their sitewide discount, whereas Revolve increased discounting on Cyber Monday.

 

Sell-out rate at 0% or 100% occurred for products with limited no. of SKUs (less than 10). Retailers with no markers for sell-out indicate that there were no products offered in the specific discount range.

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Black Friday Weekend (cont’d)

Main Offer

Boohoo and Missguided were the most aggressive with deep discount offering at 75% and 70% off sitewide, respectively. Asos and Fashion Nova offered 25% and 50% off with the use of promo codes. Revolve had up to 65% off new markdowns.

 

Additional Offer

Boohoo and Missguided gave away an extra 10% off when promo codes were exercised.

 

Time Bound

Boohoo was the only retailer to create a sense of urgency by adding a countdown timer that ended at 3pm on December 1. Other retailers ended their offers on December 2.

 

Free Delivery

Asos and Boohoo provided free shipping during Black Friday weekend.

Boohoo had the most attractive offer with the deepest discounting, additional discounts through promo codes and free shipping. However, the appeal of Boohoo’s offer was not reflected in its performance.

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Christmas Sale

A different markdown approach was undertaken during Christmas sale, with 8,726 SKUs launched for the first time. That was 11x more against Black Friday weekend, measured on daily average (7 days of Christmas sale and 4 days of Black Friday weekend).

 

Performance of First-Time Discounts

Sell-out for the first-time discounted products was 13%, mainly driven by Tops and Outerwear categories.

With a short selling window to clear out seasonal tops and heavyweight outerwear in December, it was not surprising to find retailers discounting these categories upon launch and at the beginning of the month. New arrivals accounted for 15% of first-time discounted products.

 

Performance of Total Discounts

Discount ranges during the Christmas sale were not as deep as Black Friday weekend. Common discount range was 20-29%, contributed largely by Asos, Fashion Nova and Boohoo.

Missguided triumphed with strong sell-out in the 20-59% discount range. Coming in second was Fashion Nova with high sell-out rates over 60-79% discount range. The remainder of retailers hovered at 3-14% sell-out rate across all discount ranges.

Sell-out rate at 0% or 100% occurred for products with limited no. of SKUs (less than 10). Retailers with no markers for sell-out indicate that there were no products offered in the specific discount range.

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Meet the Author

Ashley Looi

Ashley Looi combines her major in econometrics with her interest in fashion to help brands and retailers uncover actionable insights. She currently produces in-depth reports on the fashion industry and its changing retail scene across the United States, United Kingdom, Australia and Southeast Asia.

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