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Discounting up by a third approaching Black Friday

Tom Bottomley
21 November 2018

Online retailers have apparently increased discounting by a third in the months leading to Black Friday, in response to subdued consumer spending since the summer, according to the latest Capgemini IMRG e-Retail Sales Index.

UK online retail sales growth hit the second lowest level of +8.5% year on year ever recorded for October last month. Evidence for the tough period can be seen in the level of discounting on retail websites.

In the third-quarter, from July through September, 23% of overall sales revenue came from products that were on Sale. This was up almost a third as the same period last year, which was 17.8%. It was also a sharp increase on the second- quarter, from April through June, when it was 15%.

Andy Mulcahy, strategy and insight director at IMRG, says: “The latest figures corroborate a trend that has become increasingly evident over the past few months that, even months before Black Friday, a lot of retailers found themselves stuck in discounting cycles. In the third-quarter, the percentage of revenue from items sold at a discounted rate was up by almost a third compared to the same period in 2017.”

Now very much entering the Black Friday period, which started gathering momentum from the start of the week, these latest figures represent a significant growth in the discounting culture, especially with so many larger retailers sitting on slow moving stock. Retailers seem increasingly reliant on discounting to capture shopper attention.

Despite this, October was a positive month for the clothing sector on the back of its low performance in September, when growth was just +2.2% The index increased +10.1% year on year, with the strongest performance in menswear at +49.6%.

Meanwhile, a year-long investigation by consumers association Which? has found that Black Friday prices “aren’t the cheapest of the year”, saying shoppers could actually get a better bargain if they’re willing to wait and not be duped in to believing Black Friday is the be all and end all of the best discounting.

Which? tracked product prices for 12 months, and found that 87% were the same price or cheaper than their Black Friday price at other times of year. On top of that, 46% of products were cheaper than the Black Friday price on at least one day during the six months afterwards. With daily discounting, flash Sales and discount codes now the norm, it seems if Black Friday really is to be the time for bargain hungry customers to wait for, then retailers are going to have to discount even further.

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