Around 70 per cent of US consumers say they expect discounts of less than 30 per cent despite retailers offering steeper discounts than necessary in the lead up to Black Friday as per a recent report. As sale season seemingly overtakes the entire month of November, retailers stuck with excess inventory have begun slashing prices.
Seventy-five percent of consumers further indicate they are happy to pay full price for gifts that the recipient “really likes,” according to a report titled ‘The State of Consumer Spending: Holiday 2022’ by data analytics platform First Insight. Compared to 2020, consumers’ expectations around discounts are lower this year across categories. On average, 53 per cent of shoppers will be enticed to purchase with a 0–30 per cent discount compared to only 41 per cent in 2020. This finding indicates that retailers may be over-discounting this holiday season.
“Retailers are second-guessing themselves into the red this holiday season by reverting to the same, tired promotional formulas that would be unnecessary with the right data,” said Greg Petro, CEO, First Insight. “Acting on instinct instead of with predictive consumer data means retailers have only themselves to blame for the tsunami of promotions that are sweeping the country. And to think that just last year, with supply chain shortages, retailers said that deep Black Friday discounting was a thing of the past.”