China’s largest annual shopping festival has concluded and for the first time, Alibaba did not report on its traditionally record-breaking results. Instead, it stated that sales aligned with last year’s event, which would mean the slowest growth since the company kicked off Singles’ Day in 2009.
Beijing's zero-COVID policy and ongoing property crisis curbed demand this year, causing the event to lose its luster in its home market. Using the EDITED Market Intelligence platform, we investigate how Western retailers responded to this year's Singles' Day sales.
- Sluggish sales in China were reflected by a lackluster performance in the western market. Sell outs dwindled 9% YoY in the UK, while US retailers noted a slight uptick of 13% YoY.
- The surplus of products in stock versus last year – up 10% – resulted in UK retailers taking more aggressive discount measures for Singles’ Day. Both the proportion and discount depths were equal to, or higher than, the previous three years.
- Economic headwinds caused US retailers to offer steep discounts, with 30% of products advertised between 60%-70% off. However, products in the 50%-60% bracket outsold more competitive offers causing retailers to erode margins unnecessarily.
- In the UK, 30%-40% off was the most common and successful markdown for a second consecutive year. 18% of products were reduced between 20-30%, though produced only 2% of sell outs, a missed opportunity to generate more sales for this region.
- Both markets used Singles’ Day to clear through tops, bottoms and dresses. Unseasonably warm temperatures in the UK led to outerwear equaling 7.2% of products discounted at 60% off or more, while US retailers targeted accessories and swimwear.
- 22% off was the most popular discount in emails. Sale messages aligned with deeper depths observed in Market Analytics vs 2021. Cult Gaia increased YoY from 11% to 22% off, boohoo from an extra 11% off to an extra 20% off, and ASOS from 20% to 25% off.
The Markdowns Taken
US retailers took a more conservative approach with the number of products discounted this year compared to 2019 and 2020. However, following an onslaught of supply chain challenges in 2021 that caused brands to reduce sale activity, both proportion and depth increased year-on-year. Further analysis in the region reveals a 2% increase in the number of products available across the mass retailers analyzed.
The UK told a different tale versus years prior, registering a greater proportion of products on discount and the highest number seen in four years. There are currently 10% more items in stock compared to last year, a probable cause for the more aggressive sale activity. Depths were also steep in the region, matching levels observed in 2020. New Look, boohooMAN and River Island offered some of the most vigorous strategies.
|Year||US Avg Disc. Proportion||US Avg Disc. Depth||UK Avg Disc. Proportion||UK Avg Disc. Depth|
*Avg Disc. Depth = Average Discount Depth
Current economic challenges have led customers to tighten their purse strings, even over sales events. This was particularly apparent in the UK, where the majority SKU sell outs over Singles' Day dropped 9% YoY. US consumers were more receptive to the deals on offer, boosting sell outs 13% YoY.
Retailers may be tempted to use events like Singles' Day to aggressively slash prices to entice spending from frugal consumers. However, strained household budgets have made shoppers more cognizant of non-essential purchasing, and deeper discounts don't always guarantee sales. This was apparent in the US, where the bulk of products on Singles' Day were marked down between 60%-70%. Yet, the items seeing the highest success rate were reduced by 40%-50%.
A more conservative discount bucket of 30%-40% off was the most common and successful markdown applied in the UK, though retailers could have tweaked their strategies to increase sell outs. The second most popular interval was 20%-30%, where 18% of products were reduced. However, this threshold only accounted for 2% of sales, spotlighting an opportunity to push discounts into the higher bracket that is clearly the sweet spot for this market.
The Categories Reduced
Across both regions, tops, bottoms and dresses had the highest proportion of products reduced by over 60%. UK retailers lined up dressier styles for heavy markdowns, such as blouses, shirts and shift dresses, compared to the US, which targeted tank tops and wide-leg trousers.
A report by The British Retail Consortium (BRC)2found the unseasonably mild weather in the UK led retailers to prematurely discount winter apparel in October. EDITED data shows this trend was apparent over Singles’ Day, with outerwear responsible for 7.2% of UK products marked down at 60% and over.
The US concentrated on moving through accessories and swimwear, while winter warmers, including outerwear and sleepwear, weren’t reduced as steeply. UK retailers also protected the latter category from hefty markdowns, alongside footwear, where less than 4% of styles were discounted at these high levels.
Key Messages & Offers
Several offers for additional discounts including an "extra 11% off" and "extra 22% off" were layered on top of existing deals. JD Sports made this deal an app-exclusive event, a great way to drive traffic to mobile devices. boohooMAN also layered an extra 22% off on top of a 30% discount for app members only.
Targeting specific product categories is an efficient way to spur sales in areas with overflowing stock. Vero Moda ran "25% off dresses" this year, up from the "20% off dresses" promotion it ran over three years from 2019-2021. Knitwear and jeans were the focus at Only & Sons at 25% off, while tops and sweaters were targeted by ASTR The Label at 30% off. Intimates were another frequent category in the spotlight across email mentions. Lindex was more conservative with its discounting this year, offering "25% off womenswear & lingerie" in 2021, but scaling back to 20% off the categories this year
More unique deals included a free pair of jeans from 11 Honoré with any product purchase. Intimissi gave away a free travel beauty case when members logged into their account and spent more than £90 online. Burton extended its sale to two days, promoting "48% off for 48 hours."
Contributions by Krista Corrigan & Kayla Marci.
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