One of the biggest questions retailers are asking right now is whether to deepen reductions to clear stock or hold back to preserve margins. By offering a macro view of discounting as a whole, we look across regions heavily impacted by the pandemic to see how each market has changed its strategy YoY.
We also investigate the luxury market and delve into the discounts and sales that US and UK retailers are promoting now.
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Regional overview – Has discounting changed YoY?
The Republic of Korea, China, UK and US are acting more carefully with discounting, seeing less product reduced and offering shallower discounts on March 25th 2020 vs. 2019.
In contrast, Spain and Italy have a higher proportion of assortments reduced and on average discounts have deepened. This is prominent in Italy, a region that has been hard hit by the pandemic.
Australia, a region behind others in terms of shutting down retail, has the biggest year-on-year increase in the proportion of product reduced. While more products are discounted, the discount depth is relatively unchanged.
The impact on the luxury market
We analyzed a selection of luxury brands across the UK, US and IT markets. We find that current discounting levels are very similar to 2019, where very few retailers have discounted products on ecomm sites. However, we see a different story when looking at multi-brand retailers.
On March 25th 2019, less than 1% of Net-a-Porter’s product had an advertised discount. However the retailer currently has 30% of its assortment reduced. In 2019, the end of February and first week of March saw discounted product decline, along with discount depth – this has not happened in 2020.
We’re seeing the same story play out at other luxury retailers. The proportion of products on discount at Selfridges has started an upward trajectory since early March – a pattern that differs from 2019, while discounts are also deepening at Farfetch.
Retailers promoting sales: YoY comparison
A closer look at individual US and UK retailers’ promotions and how these have changed from 2019.
Retailers delaying mid-season sales or offering less:
- Accessorize UK delayed start to discounting – mid season sale up to 50% off started on March 6th 2019 vs. March 18th in 2020.
- Banana Republic UK’s main sale of 50% off select styles hasn’t materialized. Discounting full purchase has taken its place.
- H&M 2019’s ‘up to 70% off’ has been downgraded to ‘up to 50% off’ in 2020 in the UK, while in the US this has shifted from 60% to 50%.
- Coast UK Official email starting sale was on March 21st this year vs. March 5th in 2019. Since the 25th, it has promoted 50% off everything – an offer not used in March 2019.
- House of Fraser UK 2019’s ‘up to 50% off’ sale didn’t run at all.
- Abercrombie & Fitch US 2019’s exclusive online sale decreased from 60% off select styles to 40-60% off select styles in 2020.
Retailers discounting more aggressively:
- Burton / Dorothy Perkins UK 2020 sale started as ‘up to 60% off’ ( Mar 10th) progressing to 70%. In 2019, a 50% off flash sale ran for 2 days ( Mar 20th) with mid-season announced April 2nd with up to 50% off.
- Over the past week, boohoo UK offered up to 70% off everything was promoted, where this was 24% off everything last year.
- Jack & Jones UK had its mid season sale March 25th 2019 graphics but no big promotion of how much off. This year, it was pushed a week earlier, black graphics turned to red with bold ‘save up to 70%’.
- Joules UK mid season sale was up to 50% off the same both years. However, 2020 saw an extra 10% and 20% off promotions.
- Crew Clothing UK offered ‘up to 50% off’ started on March 6th both years, but an extra 15% off was promoted in 2020 vs. 10% in 2019.
- Anthropologie US 2019’s 20% off everything has increased to 25%.
- Fashion Nova US offered ‘up to 80% off’ sale last year and has been reformed to 30-80% off site wide.
Retailers running the same promotions as 2019:
- Anthropologie UK ‘up to 50% off’ launched at the same time both years.
- COS UK offered the same sales, where 50% off rose to an extra 20% off. However promotion started a week earlier in 2020.
- Dune UK ‘up to 50% off’ promoted both years.
- Fat Face UK ‘up to 50% off’ has run both years and started at the same time.
- Mango US and UK ‘up to 50% off’ is the same as 2019.
- Marks & Spencer UK ran up to 50% off and half price both years, but a week earlier in 2020.
- Monki UK sale was promoted earlier than last year, where ‘up to 50% off’ increased to 70%.
- Office UK offered ‘up to 50% off’ both years.
- Topshop and Topman US and UK started both years with 60% off. In 2020 this moved quickly to 70%.
- Macy’s US 2019 and 2020 saw the same extra 30% off VIP sale.
- Reebok US friends & family sale offered 30% off regular-priced items and 50% off markdowns remains.
Additional blanket offers are more prevalent at most of these retailers:
- Dune UK’s additional 20% off everything wasn’t evident in 2019. This was promoted in the email following its store closing communication.
- Mango UK 20% off new season on March 26th was not a promotion ran in March 2019.
- Office UK blanketed a 20% off full price new for 2020.
- House of Fraser UK promoted 20% off the same day as emails were sent first addressing coronavirus, in place of its usual sale.
- Topshop and Topman US and UK both offered 20% and 30% off everything in 2020, which was not – offered in March 2019.
- Urban Outfitters US ‘deal of the day’ including up to 50% off spring favorites ran both years.
EDITED is here to support your business during this time of uncertainty. Our COVID-19 Retail Dashboard tracks key metrics in real-time highlighting the impacts of the pandemic on the retail industry.
See our guide on the support strategies retailers can apply during coronavirus for more information as well as our daily updates on how retailers are responding to the COVID-19 crisis.