Signalling the start of Fall, and the last round of discounting before Christmas promotions kick off, competition is high for retailers over the Labor Day weekend. The holiday is ideal for driving consumers to view new Fall arrivals whilst also being a final, and vital, push to clear reduced summer stock, increasing budgets for the next season and freeing up warehouse space. So what tactics came into play this year? We dug into our commercial database and visual merchandising archive to tell the full story.
Level of discounting
Any retailer can produce splashy red campaigns broadcasting their ‘biggest sale ever’ to generate consumer interest, but access to commercial statistics lays out the facts about the size and scale of reductions. Barney’s for example, didn’t send out any Labor Day reductions email newsletters, instead opting to tastefully promote full-price new season stock over the weekend. Yet, they have one of the largest assortments of items reduced more than 50% on the US online market.
The chart to the right shows the top 10 US discounters from this weekend, drawn from data in our commercial database, based on current reductions of 50% or more. For ASOS and Shopbop, sale stock was mentioned in their weekend correspondence, but not as the focus of the newsletters, which for Shopbop was ‘Haute Hippie Fall 2013’ and for ASOS the Fall leather trend. Like Barney’s newsletter-silence, Dillard’s made no mention of their discounting on social media over the weekend, despite their 310,000 followers on Facebook alone. Instead, they promoted new season stock. Their stance is clear evidence, if such a thing is needed, that the position of marketing can project a different image to the reality of stats.
Kohls, Saks, Nordstrom, Bloomingdales, Victoria’s Secret and Loft all pushed their high reduction levels, with Loft sending out five emails from 30th August to 2nd September!
2012 vs 2013
How do weekend promotions at US retailers differ this year from last? And to what extent were they successful? Neiman Marcus and Forever 21 were the fastest retailers to communicate their Labor Day sales online, with email newsletters on the 27th August.
Forever 21 ran a ‘7 days of deals’ campaign from 27th Aug – 2nd Sept, with selections of reduced stock each day. Alongside this deal, there was an extra 50% off sale items from 29th Aug – 2nd Sept. In 2012, Forever 21 ran the 50% off sale items (but when buying two or more items) which ran until Labor Day. However, 7 days later, on the 10th September, that deal came back without its Labor Day occasion – a sign perhaps that this year’s deal from Forever 21 may be revisited in coming days. 226 products have sold out for Forever 21 in the last week, of which 81% were reduced (15% were reduced by more than 50%). Here lies evidence that Forever 21’s Labor Day customer is discount hunting!
Neiman Marcus’s 1st September newsletter promoted an ‘Evening Dash’ with 65% off between 6-9pm, that day only. They ran the exact same offer for Labor Day in 2012, so it must have been a success! The retailer also has a ‘Last Call’ email newsletter which uses a much more urgent tone. That email began pushing Labor Day promotions on the 27th August; ‘everything 35-60% off’ with their ‘deeper discounts’. This differs to 2012’s ‘everything 30% off’.
Aéropostale were next in with their promotions on the 28th August. Their ‘Labor Day Sale’ comprised of a ‘Everything 50% off’, however that reduction had been promoted in email newsletters since the 22nd August. Reduced hoodies in the Labor Day Sale newsletter were $18, but had been down to $14 in a newsletter on the 22nd August. Surprisingly, this band of discounting is later than 2012’s, which kicked in on the 14th August. Aéropostale has a huge 82.3% of their merchandise reduced, and a staggering 45% reduced more than 50%, suggesting poor buying decisions in the summer season. Despite this, 2013’s emails took a less ‘sales screaming’ look to last year’s – no red banners and huge slogans, instead including new imagery and more considered fonts.
Nasty Gal didn’t run a specific Labor Day campaign, but this year their emails of 30th Aug and 2nd Sept promoted a S.A.L.E (Super Awesome Labor day Event) with discounts of up to 85%. The emails stuck to Nasty Gal’s usual fun branding, steering clear of the typical sales imagery in red and white. Despite the ‘up to 85%’ reductions shown in the email, only 1.5% of Nasty Gal’s online offering is reduced by more than 70%. Of the products which have sold out for Nasty Gal in the past week, 45% were reduced. Nasty Gal haven’t detracted from full-price spend with an over-hyped sales campaign – we like their more subtle style!
Victoria’s Secret also stuck to the same formula they’d used in 2012, offering a 7 for $27 “Panty Party”. J. Crew tried a new tactic, having only offered free shipping on Labor Day itself in 2012, launching 30% extra off sale items on the day after. This year, their 30% extra off begun the day before Labor Day, promoted in two emails. Of 27 items which sold out in the past week, only 3 items were reduced. Instead, full priced pants, a cashmere tee and tweed dress from Fall 2013 sold well – signs that their Labor Day customer is more focused on new season styles than old season discounts. J. Crew may do well in future to offer a small discount on new season stock to drive site traffic.
Banana Republic and Kohl’s took a similar strategy with their promotions for 2013. Banana Republic’s 30% off all stock in 2012 was changed to 40% off one full-priced item this year. Kohl’s switched from a 15% off with no minimum spend in 2012 to 20% off a $100 spend in 2013. Both appear more generous to the consumer, whilst ensuring a higher commitment from them. Ann Taylor scaled back their 2012 40% off all stock, to a more modest 30% off this year.
Who didn’t do anything
All the fuss and hype can lead to a sales-fatigued consumer. Some brave retailers decided to avoid the hype of the holiday altogether, including Urban Outfitters (who’d really invested in their Back to School season), Anthropologie and Barney’s. While this may be refreshing, they could also be risking a good opportunity to clear dead stock. The data here has shown there are non-traditional approaches to promoting discounting without damaging positioning, and that such promotions can, in fact, drive full-priced spend.