Shopping from Thanksgiving to Cyber Monday reached a staggering $35.27bn, up 4% YoY, boosting US retailers' confidence despite inflationary pressures and economic concerns
Discover how Black Friday sales fared for fashion in our comprehensive roundup.
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- Out of the main sales days, Black Friday was the most successful for retailers, boasting the highest average selling prices. However, the event’s profitability dipped 10% YoY, with deep reductions eating into margins and inflation causing fewer units per order.
- Economic headwinds and inventory gluts led to US retailers emphasizing bullish discounts compared to previous years. The heaviest reductions were saved for Cyber Monday where the average markdown reached a four-year high of 50%.
- The 30%-40% discount bracket saw the most first majority sell outs. Shoppers overall favored the higher discounts amid the cost of living crisis, indicating a need for more aggressive discounting strategies in 2023, as money woes will continue into next year.
- Retailers shifted promotions away from dresses and accessories this year to focus on more margin-friendly categories, offering deep discounts on underwear and hosiery to online shoppers. The categories also double as last-minute add-ons or gifting ideas.
- Despite Cyber Month enticing customers to save on holiday shopping, deeper discounts occurred in August for end-of-season sales. Reassess 2023 strategies to avoid unnecessary price cuts and to keep up with the competitive mid-year markdowns.
- Black Friday emails kicked off on October 6th, with retailers creating urgency around blanket deals and sale-on-sale events with ‘Hot!’ ‘Fast!’ and ‘Now!’ messaging. Patagonia and Aztech Mountain opted out of sales encouraging shoppers to repair old clothes and make charitable donations.
Global Market Retail Index
Fewer Full Price Orders were Placed
Across each major event, the proportion of sales with a markdown increased, reaching a peak on Cyber Monday at 61% – an 8pp increase on 2021. The deep discounts resulted in 11pp fewer full price orders over the combined sales days.
Inflation Impacted Profitability
Inflationary pressures led to an increase in selling prices each day, culminating in a 7% uptick compared to last year’s sales. Average order values were boosted to $141.63 (+3% YoY), while units per order fell below 2021 results and heavy markdowns resulted in profitability declining 10% YoY.
Customer Loyalty Increases
Cyber Monday sales enticed the highest rate of new shoppers at 44%, yet over the combined sales days, this group dropped 3pp YoY. More VIP customers shopped compared to last year, with Thanksgiving the most appealing day for this cohort as retailers rewarded loyalty with access to Black Friday pre-sales and exclusive offers.
Increased Shipping Times YoY
While retailers were able to be more reactive with fulfilling orders on Thanksgiving, shaving off half a day vs. 2021, the demand from competitive discounts made it harder to keep up, causing average shipping times to reach two and a quarter days by Cyber Monday.
How 2022 Discounts Differed
Nearly half of US retailers’ assortments were advertised as marked down on Black Friday, with an average reduction of 49%, higher than the previous two years. The deepest discounts were saved for Cyber Monday, where the average climbed to 50%, a four-year high for the event.
The most popular discount brackets retailers participated in on this day were also more aggressive than in previous years – between 70%-80% off. Combined with inflation, increased inventory levels from misjudged consumer demand and cautious holiday spending appeared to influence these competitive markdowns as retailers held 7% and 10% more styles stocked online vs. Black Friday in 2021 and 2020.
The Impact on Sell Outs
The 40%-50% bracket was the most common among retailers. However, the overall market opted for lower discount bands to protect margins on newly marked-down styles amid growing supply chain costs, with only 22% of products experiencing a first reduction of over 50%.
The 30%-40% band received the highest amount of first majority sell outs, but this was marginal, seeing only 1-3pp difference above brackets upwards of 40%, as consumers sought high reductions to combat inflation concerns this fall. Although sell out levels increased YoY, this was marginal, growing just 0.5% as consumers tread cautiously this season on non-essential items. As the cost of living crisis will continue into 2023, discounting strategies next year will have to offer heavy reductions to entice consumers, so brands will need to forward plan assortments to build discounts into margins.
The Categories Targeted
Across Black Friday deals, tops accounted for the highest proportion of products marked down. Retailers went steepest on bottoms, underwear and hosiery across the four days. Aéropostale drove heavy markdowns on bottoms, putting all of its jeans on sale for an average discount of 60% off. Underwear and hosiery allow enticing discount depths without significantly damaging margins and offer low-priced add-on sales to meet price thresholds.
Torrid ran promotions on lace bras and underwear, while Aéropostale and Nasty Gal hacked prices on tights and fuzzy socks. Unlike last year, retailers protected inventory of dresses and accessories by refraining from deep discounts, sitting at an average of 38% and 35% off, respectively. The strategy backs rising customer demand for partywear attire ahead of the festive season.
Did Retailers Shake up Strategies?
Across the selection of US-specific retailers analyzed on Black Friday, the majority upped both discount proportions and depths compared to last year. Abercrombie & Fitch offered 99% of its assortment at an advertised discount at just above an average of 40%, matching email communications sent to customers. Gap and Old Navy were among brands running deeper promotions YoY and across a higher proportion of products versus 2021.
The strategy proved worthwhile, with majority sell outs at Gap +74% and +6% at Old Navy, and both brands leaner on inventory compared to last year. Shifting focus, Mango opted to put more products on sale, but reduced the average discount depth taking the most popular bracket from 30%-40% last year to 20%-30% this year. The brand focused primarily on reducing swim, sleepwear and hosiery.
Did Actual Discounts Match Up?
In the lead-up to holiday sales, reports typically circulate that products in Black Friday deals are often the same price or cheaper ahead of the event. EDITED can demystify these claims by comparing the actual discounts taken each month across US retailers. This analysis reveals the month with the deepest actual discounts was in August, with an average depth of 45% due to end-of-season sales. November followed closely as Singles’ Day and Cyber Month promotions resulted in an average reduction rate of 44%.
However, the most significant proportion of discounted ranges happened in January. This indicates retailers marked down a broader range of goods at a subtler discount to move stock at the start of the year without impacting margins as harshly and saved more targeted price cuts for buzzier, clearance-specific events.
Target sent the earliest email mention of Black Friday, on October 6th, 2022, kicking off discounts earlier than ever stating “shop 3 days of early Black Friday deals!” Lulus was the next retailer to highlight discounts, on October 9th, 2022, offering 20% off when using the code EBF20.
The number of emails that JC Penney, Macy’s and Neiman Marcus sent ranged from 29-64 this holiday season. Top words across subject lines from these department stores included, ‘Hot!’ ‘Fast!’ and ‘Now!’ emphasizing the urgency of their deals.
Blanket discounts and sale-on-sale communications were abundant, with retailers trying to move through stock, like jewelry, denim, loungewear and partywear. Other major themes across Black Friday emails included buy one, get one and buy more, save more deals, exclusive membership offers and last chance steals.
Patagonia encouraged customers to repair damaged products instead of shopping for new ones this holiday season. In an email sent on Black Friday, the retailer messaged, “swing by our stores for repair workshops, free repair patches and more.” Aztech Mountain was another retailer that opted out of Black Friday discounts. Instead, starting Black Friday through December 5th, 2022, the retailer will donate 15% of all online sales to the World Cup Dreams foundation.
Black Friday’s most popular discount depths communicated:
50% – 1,962 mentions
30% – 1,310 mentions
40% – 1,091mentions
Cyber Monday’s most popular discount depths communicated:
50% – 284 mentions
30% – 159 mentions
40% – 122 mentions
Got EDITED access? Log in to read our Black Friday Promotion Tracker for a week-by-week breakdown of communications, and a day-by-day breakdown in the week of the main event. For this analysis across UK retailers click here.
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