End of season sales 2022

• Discount rates are lower within the European market than in the UK and the US and key brands have significantly lower discount rates within Europe than in the US.
• The US market started off the month with the highest amount of discounted product in leading brands’ collections, although quickly surpassed by European discounts in mid-January
• Skirts and dresses are among the most discounted categories this season, as loungewear pieces are among the least.

Seasonal discounts are back, and the January season is one of most prominent periods of the year as brands are getting rid of old collections and leftover inventory. However, the pandemic continues to influence the industry, and logistic disruptions have not spared fashion. So how did the first sales of the year measure up and how have brand discount strategies changed? 

Getting an in-depth understanding of competitor discount strategies allows fashion retailers to optimize their discount strategy and get ahead of the industry shift. Leading fashion brands are able to do this with Retviews, the automated benchmarking solution that allows retailers to monitor competitor strategies and plan their collections, pricing and discounts accordingly, hitting the market perfectly every time. Dive into the following analysis on discount strategies, created using Retviews' real-time data, and get an inside look into how automated benchmarking can help your brand.

As the sale season comes to a close, there is a clear difference in how different regions carry out their discount strategies. Although the European market focuses most of its discounts in January, the US’ discount season extends from Black Friday, throughout December holidays and into the new year. With different regional strategies, there is a clear dissimilarity in the volume of discounts in collections. So how are brands taking on discounts in key markets?

Retviews data, looking at the average total share of discounted items, showcases that the US market stood out at the start of the month with the highest share of discounted products, at over 55% of collections being discounted in popular brands’ such as Aritzia, ZARA and Uniqlo’s collections. The share stooped to 40% by the second half of the month, unlike the European market, which started the discount season slowly as an average of 24% of leading brands’ collections such as ZARA and Uniqlo were discounted. This phenomenon was reversed by mid-January when discounts picked up speed in the European market, as brands were discounting larger amounts of their collections in the second half of the month. The UK market discounts however, maintain stability as leading brands' sales start off at mid range level of 40%, slightly decreasing to around 35% by the end of the month, lower than both the US and EU market's discounts .

In Europe alone, discounts differed between 2021 and 2022, as the market indicates a slower start to January sales in 2022, as opposed to the previous year. However, as previously mentioned discounts picked up during the second half of the month and even surpassed 2021’s average discounted products. Could supply chain difficulties be the driver in this differing strategy? Is demand already falling short?

As prices increase, consumers tend to cut back on expenses such as apparel, potentially making this one of the contributing factors to the sharp increase in discounts later in the month - as leftover inventory piles up, although early January showed a slowdown of discounts. Retviews data also indicates an increase in new arrivals in collections leading up to the holiday season, in comparison to 2021’s levels.

Fashion retailers are using Retviews, the automated benchmarking solution to plan their discount strategies, adapt pricing and optimize assortment strategies accordingly, thus getting ahead of the competition in the industry-wide shift.

Different regions also mean different discount rates across each key market. Knowing exactly how to discount collections in different or new markets is essential for fashion retailers, in getting the right strategy and optimising their positioning in each country. 

Retviews data indicates a clear, although slight difference in discount rates across markets. Overall, the EU market (taking into account brands such as ZARA, Mango and Uniqlo) stands at the lower end of discount rate in comparison with the UK and the US, as the US takes the lead with an average discount rate of 45% across leading brands, throughout the month of January. 

Taking a more in depth look at several popular brands, there is an evident difference in discount strategies, as ZARA sales within the European and US markets showcase an 18% difference in discount rates. Uniqlo sales also are higher within the US market, showcasing a 15% higher discount rate.

Taking a closer look at where leading brands are placing their discounts, several interesting categories stand out. Among the most and least discounted categories stand sweatpants, sweatshirts, skirts, dresses, and blazers, all of which fall into the questions fashion retailers are faced with this year - is loungewear here to stay, or is it going to fizzle out and make room for occasion wear once again?

Retviews data showcases an interesting difference between these popular categories, all of which have an evidently similar out-of-stock rate, their discount rates and the volume of discounts being vastly different. Among the most discounted categories stand occasion wear pieces skirts, dresses, and blazers, with an average of 42% of the skirt category being discounted at an average rate of 18% across leading retailers’ collections. On the other end of the spectrum stands loungewear, as only 27% of sweatpants are discounted, with an average discount rate of 11%.

Is there a large amount of leftover stock in occasion wear, provoking higher discounts, as brands invested in the consumer shift for the holiday season - which was put on hold by the Omicron variant, inevitably putting a damper on holiday parties and the dressier styles shoppers were excited to flaunt?

Discount strategies vary vastly among different countries and key markets, which in turn makes pinpointing the ideal strategy to avoid waste and maximize margins crucial for fashion retailers. Knowing how to tackle different regions is an essential factor in optimizing a brand’s retail strategy and getting ahead of competitors as the fashion industry is experiencing a vast shift, driven by factors such as logistic issues, pandemic recovery, and circularity.

Fashion retailers are using the automated benchmarking solution Retviews to stay ahead of the industry shift, monitor competitor strategies, adapt their own pricing, and discount strategies and in turn be able to optimize performance in the industry. Don’t miss out on getting ahead of the changing industry - find out how automated benchmarking can help your brand tackle discounts and nail the perfect retail strategy.