Retailers Are Slashing Prices But These Brands Are Selling Through
Retail data and analytics firm EDITED analyzed 75 major U.S. online retailers stocking more than 27,500 apparel, accessory and footwear brands and identified some telling developments and trends.
For one, the rate of discounts have skyrocketed so far this month. While the rate of discounts in September was up a mere 2.8 percent compared to last year, it’s increased to 32.6 percent in October year-on-year.
“The retail sector is already engaging in an aggressive discounting strategy with limited consumer spending," says Katie Smith, senior retail analyst. "However, as retailers are limiting new assortments at the same time, this means they are not overstocking inventory that could lead to even deeper price reductions."
Bucking the trend of diversifying assortments to differentiate the store experience, there were 13.5 percent fewer new arrivals in September 2017 versus September 2016, as retailers look to slash prices with current inventory to encourage online shopping. This grew to 24 percent fewer new arrivals in October 2017 year-on-year.
Discounts are deeper this year. While retailers average 20 percent to 30 percent for initial discounts, in September this year, 42 percent of initial discounts were at 40 percent or higher. Steeper discounts were primarily with jewellery, bags and watches, particularly with brands like Effy, Liz Claiborne and Kate Spade.
Who's leading in all of this price slashing? Macy’s, Nordstrom Rack and ASOS have made the highest number of price reductions since September, while Nike, Missguided and Adidas experienced the highest number of full-price sellouts in September.
Pumpkin spice just arrived but somehow...'tis the season: consumers have commenced holiday spending. Full-price sellouts of products were up 0.3 percent in September year over year.
"While holiday sales happen earlier each year, retailers must remember that it’s a three-month marathon, where making the right decisions is critical to avoid sacrificing margins,” Smith adds.