Are Retailers Over-Promoting For Holiday 2016?

by MR Magazine Staff

Unless you’re looking for a Hatchimal, a Nintendo NES Classic, or the Sony Playstation VR Launch Bundle, odds are what you’re looking for is in stock. In fact, according to Adobe Digital Insights, out of stock rates from Nov. 1 to Nov. 22 averaged 5.2% down year over year by over 2%, and out of stock rates peaked at 10.5% on Black Friday. And, according to data from both Adobe and 360pi, even in cases where retailers had overstock positions, they were not running discounts nearly as heavily during the early part of November as they might have – even when consumers were not spending according to past patterns (primarily thanks to post-election unease). But the election is done, whether the electoral college has voted or not, and consumers have moved into the full swing of holiday spending. That initial hit to retail spending because of the election – which Adobe estimated to be as much as $300 million on Nov. 11 alone – has not necessarily been made up in total sales. Taken together, whether retailers need to or not, they are feeling the pressure to discount. According to analysis by DynamicAction, of more than $6 billion in North American online retail transactions, retailers are promoting much more heavily in 2016 than in 2015 – overall promotions are up 34% and up 52% specifically within the holiday season so far. Retailers are holding on average 12% more inventory by mid-December than they were in 2015. Read more at Forbes.