- Vivian Hendriksz |
London - Fashion retailers across the globe are preparing for a difficult holiday trading season. The rate of discounts has skyrocketed over the past few weeks, according to the latest data from Edited, as online retailers being cutting prices earlier than previous years.
The rate of discounts in September grew 2.8 percent in comparison to last year, according to the retail analytics company analysis of 75 leading apparel retailers which offer more than 27,500 apparel, accessory and footwear brands. However, this percentage has surged a whopping 32.6 percent in October year-on-year, as retailers are keen to boost holiday spending as much as they can, despite increasing pressure on consumers disposable income.
There were 13.5 percent fewer new arrivals in September 2017 in comparison to September 2016, as retailers sought to hold off on new product drops in favour of cutting prices on their current inventory to encourage shoppers. This amount has only grown in October to 24 percent fewer new arrivals in October 2017 year on year.
In addition, retailers were also found to be offering deeper discounts earlier this year. Although most online apparel retailers offer 20 percent to 30 percent off for initial discounts, 42 percent of initial discounts in September this year were at 40 percent or higher. Higher discounts were most noticeable in the accessories and jewellery category, in particular with brands such as Liz Claiborne and Kate Spade.
“The retail sector is already engaging in an aggressive discounting strategy with limited consumer spending,” commented Katie Smith, senior retail analyst at Edited. “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. 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.”
Leading fashion retailers such as Macy’s, Nordstrom Rack and Asos were all found to have made the highest number of price reductions since September this year, whereas Nike, Missguided and Adidas saw the highest number of full price sellouts during the same month, indicating that early discounting may not be the best way to achieve full price item sellouts.
Photo: Asos, website