Retailers axe data analytics for mass discounting blitz

The retail sector might be ploughing hundreds of millions of pounds into data-driven marketing and analytics in an effort to get under the skin of consumers but a need to shift stock quick is triggering record levels of discounting in the lead-up to Christmas.

According to Deloitte, discounting already stands at a record 43.8% across the industry, with predictions it could go over 50% by Christmas Eve for the first time.

Deloitte’s MarkdownEdge analysis, found that discounts on the high street ranged from 8% to 78% and are being led by mid-market clothing retailers, averaging 30% and expected to reach 55% by Boxing Day.

The management consultancy blamed the drop on a combination of mid and end-of-season autumn sales running into December, along with Black Friday promotions, It said that while this “double whammy” helped to sell stock, “a pre-existing oversupply could see a tipping point reached imminently, as retailers discount further to shift goods”.

Deloitte lead consumer analytics partner Jason Gordon said: “Retailers have faced a challenging year, as consumer confidence has continued to fall amidst macroeconomic uncertainties. In addition, the introduction of Black Friday in recent years means consumers have also come to expect an increasing amount of pre-Christmas discounting.

“The result is a blending of promotions, one seeping into the next, and a steady price decline rather than a steep Boxing Day drop, reminiscent of Christmases past. With one shopping weekend left before Christmas, this week could see a tipping point in promotions.”