Is Discounting Usage Intensifying in eCommerce?
)
If you are a regular reader of this column, you’ll know that 2024 has been a bit of a shocker in terms of revenue growth thus far. Particularly weak performances across January and April have conspired to leave the year-to-date growth figure, with five months of data in, running at -4.3%. This is against a forecast of 0%, so you can see just how far behind those months have dragged us. There are numerous possible reasons behind this sluggish performance – the failure of summer to get started, economic malaise etc – though it is worth saying that the growth trajectory is pointing in the right direction, it’s just very slow pedalling (uphill) to arrive at that destination.
The Role of Discounting in Retail
If trading conditions are proving tough though, are we seeing retailers reach for certain levers that you might expect to help stimulate some demand – chief among which would be discounting?
The answer is yes, but it’s a complicated yes. To be clear, there is nothing uncommon or necessarily wrong with discounting, and there are many different ways in which it can be deployed. The retail calendar organically lends itself to having periods of clearance as seasons change – any stock that has not sold needs to be run through to make space in the warehouse for the new products. Retailers also run flash sales, which might be an attempt to build a bit of demand and catch up on revenue targets if things have proven slower than they had anticipated (or, indeed, to steal a march on the competition).
Challenges of Entrenched Discounting
The slightly more problematic occurrence of discounting is where it isn’t being used for cyclical clearance purposes, but is instead a switch that is pressed to stimulate demand – not in the way a flash sale operates, which might only last for 24 hours; it is switched on intended to just last for a short timeframe, but actually it can become far longer.
The pattern has been pretty clear historically – when times are hard and customer propensity to buy under pressure, retailers start to fall into the trap of a form of discounting that gets entrenched. The ones that are struggling push it the hardest, their competitors get drawn into it, and before you know it a widespread trend is established that many find it hard to stay out of.
That does appear to be where we are now. When compared to previous periods, the intensity of it is not significantly higher at the moment, but there is a difference worth noting. The below chart shows the percentage of all items sold that had a discount applied against them. The percentage hovers around the 50% mark for most of the two-year period covered by the chart, but the last four months have seen it stay above that point – the first time it has done so consecutively.
While it is quantifiably the case that it’s the first time that has happened, it has almost been the case several times over the past two years anyway.
So discounted products make up a major element of the overall sales mix and have been over the whole cost-of-living era. Is it getting more intense? Arguably, but only marginally so. Retailers would love to see an improvement in shopper confidence that will enable them to just shave a few percentage points off that chart…
More IMRG Insights
Join us on 18-19 September to access event more insights at the IMRG Optimisation Stage!
Latest News
-
Camilla Mackay-Wilson, Head of E-Commerce, Retail at Soho House, shares her career journey and insights into the world of eCommerce. She discusses her path from Marks & Spencer to leading digital stra ...
-
The 2025 eCommerce Awards are now open for entries, and the search for the industry's best is officially on.
-
Martina Guizzardi, Global Senior CRM & Loyalty Lead at Oner Active, shares key career lessons, consumer insights, and strategies for building lasting customer relationships.
-
eCommerce Expo is delighted to introduce our newly formed 2025 Advisory Board – an impressive assembly of eCommerce visionaries poised to transform the event landscape.
-
Have we got our eCommerce back?
25 Feb 2025 Andy Mulcahy, Strategy and Insight Director, IMRGAfter years of decline, eCommerce is showing signs of recovery. What’s driving this shift, and is the industry finally bouncing back? -
How Did eCommerce do in 2024?
27 Jan 2025 Andy Mulcahy, Strategy and Insight Director, IMRGAndy Mulcahy, Strategy and Insight Director at IMRG, reflects on the challenges and growth patterns of eCommerce in 2024, highlighting sector winners, market shifts, and what lies ahead for online ret ... -
Introducing Growth Summit 2025 – The Premier Invite-Only Event for Senior Retail Leaders
27 Jan 2025We are delighted to announce the launch of Growth Summit 2025, an exclusive, invite-only event taking place on 24th September 2025 at ExCeL London, brought to you by eCommerce Expo and IMRG. Designed ... -
Discover how Frankie Thorogood built and scaled multi-million-pound eCommerce brands, navigated challenges, and learned invaluable lessons in entrepreneurship. From risk-taking to resilience, get insi ...
-
2024 in Review: eCommerce and Marketing
18 Dec 2024The ever-evolving world of eCommerce and marketing has seen transformative shifts this year. Here's what stood out in 2024.... -
So, Black Friday – Was It Any Good?
12 Dec 2024 Andy Mulcahy, Strategy and Insight Director, IMRGBlack Friday 2024 showed positive revenue growth, marking the first uplift since 2020, but traffic remained subdued, dampening the overall success. Year-on-year comparisons were skewed due to the timi ... -
Black Friday 2024: A Test of Nerve
25 Nov 2024 Andy Mulcahy, Strategy and Insight Director, IMRGRetailers are gearing up for the biggest sales event of the year, but with shifting dates and unpredictable shopping habits, it’s a rollercoaster ride. Andy Mulcahy, Strategy and Insight Director at I ... -
November 2024 in Marketing and eCommerce
25 Nov 2024 Lily Tokmantseva, Head of Marketing & Content - eCommerce Expo, Technology for Marketing and IMRGBite-size updates on what happened in marketing and eCommerce this month, to keep you ahead of the curve and inform your campaigns. -
How to Grow Your Small Business on TikTok and Instagram with Ramona Gohil, Founder of Rani & Co
25 Nov 2024 Laura Dazon, Senior Content Marketing Executive at CloserStill MediaIn this exclusive interview, we sit down with Ramona Gohil, founder of the feminist jewellery brand Rani & Co. From humble beginnings to TikTok-fuelled success, Ramona shares her journey, insights int ... -
Whisper It…but eCommerce Might Just Be Back
30 Oct 2024 Andy Mulcahy, Strategy and Insight Director, IMRGECommerce has been in the doldrums for a few years now, with negative revenue growth, lower conversion and dips in site traffic becoming an accepted part of market conditions; that has been the post-p ... -
Zaria Parvez: Senior Global Social Media Manager at Duolingo – Creativity, Community, and Social Media Strategy
11 Sep 2024 Laura DazonMeet Zaria Parvez, the mastermind behind Duolingo's viral social media success, who grew their TikTok from 50K to over 11M followers. Discover how she transformed Duolingo into a social-first brand, c ... -
Is The Future of eCommerce Looking a Bit Brighter?
10 Sep 2024 Andy Mulcahy, Strategy and Insight Director, IMRGIf you are a regular reader of this column, you’ve probably gotten used to the updates often containing news that don’t paint a great picture of eCommerce performance. But I’m just the messenger! I ca ... -
Meet Adam Ull, Global Product Information Lead at H&M, who is transforming commerce by using data and AI to enhance customer experiences across digital channels. He discusses building agile systems an ...
-
In the ever-evolving world of eCommerce, UK merchants must adopt strategic approaches to ensure sustainable growth both at home and abroad. In our recent webinar featuring Emily McMorran, CX Lead at w ...
-
5 Top Tips for Speaking at eCommerce Expo & Technology for Marketing
21 Aug 2024 Alyssia Smith, Senior Content Manager at CloserStill MediaSome essential tips to help you deliver an impactful presentation with Alyssia Smith, Senior Content Manager at eCommerce Expo and Technology for Marketing -
A new source of information for businesses wanting to expand and increase their customer base.
-
Health & Beauty: A Bright Spot For eCommerce
30 Jul 2024 Andy Mulcahy, Strategy and Insight Director, IMRGWhat a miserable year it’s proving to be for eCommerce. Revenue has performed well below expectation, site traffic overall has seen barely any growth in 2024 so far and conversion remains suppressed. ... -
LeMieux's Head of eCommerce On International Expansion Strategies
28 Jul 2024 Laura DazonShaun Loughlin, Head of eCommerce at LeMieux, shares his 20-year journey in retail and eCommerce, emphasising international expansion strategies. -
Building Strong Partnerships Between Retailers and Marketplaces for Excellent Customer Service
27 Jul 2024Discover how Deliveroo enhances grocery delivery by partnering with retailers, offering logistics, and advanced tech integration, ensuring fast and reliable customer service. -
Is Discounting Usage Intensifying in eCommerce?
26 Jun 2024 Andy Mulcahy, Strategy and Insight Director, IMRGExplore how increasing discount usage in eCommerce is impacting revenue growth in 2024. Discover the trends, challenges, and strategies retailers are employing to navigate tough trading conditions. -
How Big Bus Tours and Oban International Embraced Search Tech To Bounce Back Bigger and Better
26 Jun 2024Big Bus Tours transformed its digital marketing amid COVID-19, leveraging local insights and tech innovations. The result? Increased revenue, higher click-through rates, and record-breaking digital pe ... -
2024 eCommerce Awards – Finalists Announced
26 Jun 2024We are thrilled to reveal the initial category finalists for the 2024 eCommerce Awards. -
Your Month in eCommerce and Marketing
26 Jun 2024 Lily Tokmantseva, Head of Marketing & Content - eCommerce Expo & Technology for MarketingBite-size updates on what happened in marketing and eCommerce this month, to keep you ahead of the curve and inform your campaigns. -
Meet SJ, AllSaint's Global Leader in CX, Fraud & D2C, as she tells you more about implementing AI at a major British fashion retailer, as well as strategies for payment security and fraud prevention
-
UK eCommerce in 2024: Struggles, Bright Spots, and Hopes for Recovery
29 May 2024 Andy Mulcahy, Strategy and Insight Director, IMRGThe UK eCommerce market has underperformed in 2024, with actual revenue growth consistently below forecasts, though some sectors like health & beauty show resilience and potential for improvement. -
Insights on the transformative impact of generative Artificial Intelligence in eCommerce from daily applications to long-term implications.