Shopping in the US from Thanksgiving to Cyber Monday was up four per cent year on year.

This has boosted retailers’ confidence despite inflationary pressures and economic concerns. Across each major event, the proportion of sales with a markdown increased, reaching a peak on Cyber Monday at 61 per cent. Inflationary pressures led to an increase in selling prices each day, culminating in a seven per cent uptick compared to last year’s sales.

Average order values were boosted three percent year on year while units per order fell below 2021 results and heavy markdowns resulted in profitability declining ten percent year on year. Cyber Monday sales enticed the highest rate of new shoppers at 44 per cent. More VIP customers shopped compared to last year, with Thanksgiving the most appealing day for this cohort as retailers rewarded loyalty with access to Black Friday pre-sales and exclusive offers.

Average discount per cent increases over previous year

While retailers were able to be more reactive with fulfilling orders on Thanksgiving, shaving off half a day versus 2021, the demand from competitive discounts made it harder to keep up, causing average shipping times to reach two and a quarter days by Cyber Monday.Nearly half of US retailers’ assortments were advertised as marked down on Black Friday, with an average reduction of 49 per cent, higher than the previous two years. The deepest discounts were saved for Cyber Monday, where the average climbed to 50 per cent, a four-year high for the event.The most popular discount brackets retailers participated in on this day were also more aggressive than in previous years – between 70 per cent to 80 per cent off.

Combined with inflation, increased inventory levels from misjudged consumer demand and cautious holiday spending appeared to influence these competitive markdowns as retailers held seven per cent and ten per cent more styles stocked online vs. Black Friday in 2021 and 2020.The 40 per cent to 50 per cent bracket was the most common among retailers. However, the overall market opted for lower discount bands to protect margins on newly marked-down styles amid growing supply chain costs, with only 22 per cent of products experiencing a first reduction of over 50 per cent.

As the cost of living crisis will continue into 2023, discounting strategies next year will have to offer heavy reductions to entice consumers, so brands will need to forward plan assortments to build discounts into margins.Across Black Friday deals, tops accounted for the highest proportion of products marked down.

Retailers went steepest on bottoms, underwear and hosiery across the four days. Aéropostale drove heavy markdowns on bottoms, putting all of its jeans on sale for an average discount of 60 per cent off. Underwear and hosiery allow enticing discount depths without significantly damaging margins and offer low-priced add-on sales to meet price thresholds.

Blanket discounts and sale-on-sale dominate

However, the most significant proportion of discounted ranges happened in January. This indicates retailers marked down a broader range of goods at a subtler discount to move stock at the start of the year without impacting margins as harshly and saved more targeted price cuts for buzzier, clearance-specific events. Blanket discounts and sale-on-sale communications were abundant, with retailers trying to move through stock, like jewelry, denim, loungewear and partywear. Other major themes across Black Friday e-mails included buy one, get one and buy more, save more deals, exclusive membership offers and last chance steals.