Consumer Insights

On Super Saturday, How Low Did Retailers Go?

Who holds the power in the relationship between retailers and consumers? With fewer purchasing options, the answer might very well be the latter, but the combination of a panicked holiday shopping season and more online and offline deals that the average customer can research, some retailers are feeling the sands shifting right under their feet.

Case in point: This Super Saturday (or Panic Saturday as habitual procrastinators might know it), retailers had one last unofficial official retail holiday to capture last-minute shoppers’ dollars. However, The Wall Street Journal explained that instead of raking in the dough at the expense of shoppers who have no choice but to buy out their Christmas lists, some brands were offering discounts, better than anything seen on Black Friday or Cyber Monday.

For example, Best Buy listed an Apple Watch Sport model for $349 on Black Friday, a $50 discount off the original price. However, Super Saturday kicked the price down by an additional $50 for a new grand total of $299. JCPenney also outpaced earlier promotions with a half-off deal on a $48 Lego kit. While these discounts may not make much of a difference to retailers’ bottom lines, the feeling some customers get when saving just $10 or $5 on a holiday gift shouldn’t be overlooked when it comes to spurring more seasonal purchases — a fact merchants have keyed in on.

The data backs up the circumstantial evidence, too. Retail research firm Dynamic Action found that even since before Black Friday, retailers have been listing about 21 percent of all products at less than full price compared to 2014. Moreover, from early November to December, discounts, deals and promotions were used 23 percent more frequently than last year.

Could these signs be indications that customers are regaining some small measure of power in the path to purchase? It’s no secret that the profusion of online deals and widespread availability of cheap, fast shipping options makes waiting for deals less stressful for the average shopper, and Britt Beemer, founder of America’s Research Group, told Los Angeles Times that as more and more shoppers start to recognize that the number of deals out there could mean more are on the way if they can wait, retailers have to do something to jumpstart that purchasing mentality.

“We have a situation where consumers have got dollars to spend, but ‘Will they spend it?’ is the big question,” Beemer said. “They have been holding back.”

This deal-seeking strategy isn’t new to just last-minute shoppers, either, as Beemer noted that almost 66 percent of shoppers around Thanksgiving purchased exclusively products that had been marked for early bird specials and other promotions. Rather than a recently developed quirk among last-minute shoppers, this heat-seeking desire for discounted goods above all else might more appropriately be called the new paradigm of holiday shopping — and possibly beyond.

Nothing in retail happens in a vacuum, though, and while shoppers may very well be acquiring a taste for off-price products, Oliver Chen, an analyst at Cowen and Co., told Chicago Tribune that unseasonably warm temperatures have thrown an additional wrench into the gears of retailers who stocked up on winter weather gear and are now trying to cut their excess inventory losses through heavy discounts.

“Seasonal inventories of coats, boots and sweaters are high,” Chen said. “Warm weather combined with weak traffic is likely causing more markdowns and, subsequently, deeper markdowns than planned.”

Retailers should be able to adjust accordingly to this emerging kind of discount-centric customer, but if they have to plug holes in the dyke they caused themselves through poor inventory forecasting and management, household brand names could find themselves under water fast.

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