Holiday Season Promotional Activity Appears to Ease 

Retailers maintain some price flexibility for now

Author: Andria Cheng

November 29, 2017

Discounting has been prevalent and aggressive so far this holiday season, but early data indicates many retailers haven't had to escalate promotional activity beyond last year's levels, thanks to better inventory control and improved consumer spending.

Average discount on Black Friday circulars, per Market Track

According to pricing firm Market Track, the average discount offered by 15 brick-and-mortar retailers in their Black Friday circulars was 44% this year, compared to 45% last year. The average circular discount level at Best Buy was 40%, compared to 41% last year. At JC Penney, this year’s 54% was four points below last year’s 58%. Target’s average circular discount of 37% was also 1 point lower than last year.

Market Track did find some stores with higher discounts: Walmart, Sears and Kmart all were offering higher Black Friday circular discounts on average, it said.

Its study of 17 product categories also found lower overall promotional level this year. On average, those categories combined saw a 45% discount, compared to 48% last year. Of the 17 categories, 12 were lower or flat and five were higher. Among the five exceptions were entertainment items (think of items like PlayStation 4 and Xbox One), which saw a 37% average discount this year, three points higher than last year.

Meanwhile, even though retailers are seeking to include in their circulars hot products of the year, including Amazon’s digital voice assistant Echo Dot, Nintendo Switch video game console and hot toy Hatchimals, deal tracker site said 60% of retailers’ doorbuster deals actually stay the same each year. For instance, in its study of Black Friday ads the past couple of years, it found many deals are perennials: For instance, a Kohl's offer for hot toys at $19.99; a Walmart offer of $298 for a 55-inch 4K smart TV, and more than 75 DVD and Blu-ray movies for $1.96 each; and a $399 DJI Spark Drone at Target.

The average savings for some of the season’s hot items probably topped out around 35%, according to another deal site,

Online, the surge in demand doesn’t translate to desperate promotional hustle and bustle either. For example, according to data analysis startup firm Thinknum, a study of Amazon’s “Gold Box” items listed daily on its site found that the number of those items it had on sale this Black Friday was not only 30% fewer, the average discount price level was also 6% higher this year. (To be sure, Thinknum said the items don’t represent apples to apples comparisons.) 

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More broadly in the ecommerce landscape, the discount level for some hot product categories also didn’t all trend lower either. While the largest online price drops this year heading into Cyber Monday this year included toys with an average discount of about 19% and TVs at 21%, at the same time last year TVs saw an average discount of 21.5% and toys 16.2%, according to Adobe data. (Adobe said the items also may not be on a comparable basis.) 

However, while for some veteran holiday shoppers who may be able to notice the year-over-year sale differences, for many shoppers the thrills and marketing of getting a deal itself may be more than enough, let alone the fact that shopping over Thanksgiving, Black Friday and Cyber Monday period is now a familiar tradition and social event for many. Related: The changing dynamics of Black Friday 

From Thanksgiving Day through Cyber Monday, more than 174 million Americans shopped in stores and online during the just-concluded holiday weekend, topping prior expectations by 10 million, according to a National Retail Federation survey of more than 3,200 US consumers conducted by Prosper Insights and Analytics.

Three-fifths of the shoppers over the five-day period said the majority of their purchases were driven primarily by sales, and only 7.7% said their holiday weekend purchase was made without any sale. On the other end of the spectrum, 31% said discounts and promotions drove all of their purchases. 

Among the weekend shoppers, 46% combined said a limited-time sale or promotion or free gift with purchase convinced them to actually make a purchase they were hesitant about, beating factors such as helpful salesperson or customer service. Not surprisingly, absence of discounts ranked only after "no free shipping" in keeping consumers from making a purchase.

And retailers shouldn’t expect to let up on the promotional game. One-fifth of consumers haven’t even started their holiday shopping, and less than two-fifths said they have completed more than half of their holiday purchases, according to the NRF survey. That makes the art of managing consumers’ price perception a crucial exercise. After all, the survey showed more than two-fifths of consumers think promotions will only get better than from this past holiday weekend heading closer to Christmas, while only less than 10% think it will get worse.