Kayla Marci

November 8, 2021

What should and shouldn’t be discounted for Black Friday 2021

Plus other hacks to win the most important sales event of the year amid supply chain disruption.

You’ve spent months feverishly working to sign off on the perfect discount strategy for Black Friday. However, there is still time for last-minute tweaks to save your margins from any unnecessary damage. We break down the biggest Black Friday trends to come out of last year and lay out what products to reduce and avoid discounting.

With a little over a fortnight until the big day, you should be making sure any items such as recent hot sellers (yes, cut-outs, we’re looking at you) aren’t lined up for 60% reductions over Black Friday weekend, as well as monitoring the shifts your competitors are making.

The success of Amazon’s Prime events, coupled with the ever-growing environmental concerns associated with massive sales periods, has seen Black Friday fall out of fashion for some time. This makes it even more crucial for retailers to nail their discount strategies and reverse margin erosion. 

EDITED Retail Intelligence combines world-class data with real-time analytics, giving you the tools to win the golden quarter. Get in touch to find out more. 

EDITED's key takeaways 

  • Though holiday spending in the US is projected to reach a record $207bn online, only 5% YoY growth is expected for Black Friday's three traditional sales days, indicative of the event losing its allure over the years.

  • After turbulent discounting in 2020, retailers have adopted more conservative strategies throughout the year, which will bleed into the sales period. Retailers are returning to pre-pandemic discounting, with pared-back promotions. However, more styles are receiving their first discount in the lead-up to the event than in the past two years, as brands entice consumers with a fresher sales offering.

  • In addition to subtler promotions, there are 52% and 42% fewer products currently available in the US and UK, respectively, vs. 2019 due to supply chain snarls. Retailers need to be vigilant with discounting to maintain an ample product offering as delays persist. Taking category markdowns instead of blanket reductions can help keep margins intact. Also, prevent clearing items with a long stock cover as they may be impacted by price inflations, making them more expensive to get back into stock.

  • Products from last summer are a no-brainer for markdowns while "spend & save" offers can be applied to newer fall styles. Look to slash items already seeing significant markdowns due to their waning trend status. Think skinny jeans, jeggings, house dresses, formal blouses and suiting.

The current state of play

Rethinking Black Friday

Post-GFC, year-round discounting, and backlash against excessive consumerism have all led to Black Friday losing its luster in recent years. The trend of closing physical outlets on Thanksgiving or giving staff the day off to spend time with families has gained momentum. Big box retailers like Macy's, Walmart and Target will be shuttering stores on Thursday November 25th, underscoring the importance of fail-safe ecommerce strategies. Meanwhile, sustainably-minded brands like HURR, ASKET, Allbirds and Deciem are well known for taking a firm stance against Black Friday sales, influencing mainstream brands to rethink their offers. For example, last year, Hush diverted from sales, instead donating 20% of proceeds from the day to a charity working to end homelessness.

A return to traditional sales days

Discounting in 2020 blurred together, with retailers panic reducing during the pandemic's early days and Amazon Prime sales events pushed closer to Singles' Day and Black Friday. A recent survey revealed that brands are either planning to run holiday sales for more than five weeks or are preparing to return to more margin-friendly sales cadences, concentrating on taking reductions only on the key dates: Thanksgiving, Black Friday, Cyber Weekend and Cyber Monday.

Image via ASKET

Fewer items and higher prices

Ongoing supply chain bottlenecks have resulted in high demand for fashion and fewer products in stock. The number of styles currently available online in the US has plummeted 52% compared to 2019, while the UK is down 42%. Adobe has also reported the number of out-of-stock messages from online retailers is up an eye-watering 360% vs. January 2019. Additionally, costs across raw materials and shipping containers have surged, causing key categories to experience price inflations. Coupled with retailers favoring conservative markdown strategies throughout the year to offset a discount-laden 2020, the evidence stacks in favor of more pared back reductions this Black Friday.

First discounts are at a two-year high

Last year's COVID outbreak saw retailers' discounting deeper and broader on existing products to clear hard-to-move categories amid the pandemic, only adding fresh styles into sales at the height of November. This year, more products are receiving their first discount ahead of the event. The number of first discounts over the past six weeks is up 3% YoY, more aligned with 2019 patterns, which will swell closer to Cyber sales if the trend stays on course.

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How much to reduce by

Currently, the most popular advertised discount bracket is spread between 30%-40% and 60%-70% off in the US, both representing 28% of men's and women's discounted products. This time last year, the strongest discount bracket was between 50-60% off, where 41% of items were reduced. This showcases a shift in strategy for 2021 to distribute markdowns across promotional thresholds instead of the bulk of goods reduced at one steep percentage.

The UK is putting forth a more conservative stance. While retailers are favoring the same discount interval as last year, 30%-40% off, the proportion of styles currently discounted has been pulled back by ten percentage points YoY.

black fridayShein Homepage US - Nov 3, 2021

The categories to target

The majority of products discounted over the Black Friday period in 2020 across both regions sat within tops. This is also the most stocked category, giving retailers more freedom to take reductions with less concern about shortages.

Products without strict sizing are ideal for reducing to help minimize returns. Though accessories make up a smaller proportion of products within the UK, it was the second most discounted category last year market-wide. Retailers targeted handbags and jewelry in 2020, with uncertainty surrounding events still looming. As this year is appearing more optimistic for celebrations and the supply chain crisis is motivating early Christmas demand for gifting categories, ensure only slow-moving styles are advertised as discounted.

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Last year's penchant for waist-up Zoom dressing resulted in bottoms being the third most-reduced category. As the second-highest stocked category in the UK, this region has more room for reduction than US retailers.

Footwear stocked across both regions outpaces dresses and outerwear. However, for Black Friday 2020, more apparel had discounts applied. Follow suit and pull back on reducing footwear, as complicated sizing could lead to returns or unwanted purchases. This category is also the top performing product within activewear across most regions, making up between 30%-43% of sell outs, while sneakers are experiencing price increases due to demand from factory delays, rendering markdowns fruitless.

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What to avoid marking down

Black Friday is an opportunity to clear older and slow-moving pieces ahead of the peak Christmas trade and ring in the new year with a fresh assortment. Retailers should avoid reducing items with longevity that lend themselves to future trends. This includes preppy pieces like bomber jackets and polo shirts, with collegiate elements poised for continued success in Spring 2022. The influence of Kelly Green, up 409% since 2019, is set to follow into next season through footwear, accessories and bold tailoring. Ensure it's excluded from promotions to maximize ROI.

Seasonal essentials like gifting and holiday-themed apparel are hot commodities. They won't need reductions to move through as forecasted delays have led to consumers shopping early to avoid missing out. Retailers should also avoid marking down cotton basics or denim with a long cover as replenishments will be more expensive as a knock-on effect of the supply chain crisis. With a strong performance outside of sales and its peak purchasing period of January around the corner, active and sportswear is another category to keep at full price.

What's prime for reduction

Products with a seasonal lifespan are optimal for reduction. Sandals are currently the most-discounted footwear style, but exclude sporty and hiking silhouettes from your markdowns, as well as those inspired by cult brands. Clear through remaining summer shorts, where 48% are reduced compared to sweatpants at 25% and trousers and jeans, both 27% in the UK. In the US, 65% of shorts and skirts are already discounted.

Despite denim's success, interest in the once-prestigious skinny silhouette has fizzled out. Currently, the skinny equals 41% of jeans reduced in the UK vs. straight leg styles at 30%, while in the US, 64% of jeggings are advertised as marked down.

The sun has also set on another former It trend - the house dress, which has been overtaken by sexy party styles. 97% of smock dresses in the US are on sale, with an average discount depth of 54% vs. 61% of products discounted in the UK, averaging a 45% reduction rate.

While workwear is seeing a revival, a more elevated, smart-casual aesthetic has emerged over traditional office or formal attire. Retailers should evaluate their blouse assortment, currently sitting at an average discount depth of 54% in the US and 43% in the UK, and suits where 73% are marked down at American retailers.

There’s no replacement for hard data when you’re tackling your trickiest discounting decisions. Get in touch here to learn how EDITED can help engage customers without sacrificing margins during peak sale periods.

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