March and April aren’t typically major markdown months for fashion retailers. But while many close stores and see revenue take a nosedive due to the COVID-19 pandemic, discounting is on the rise.
According to retail data company Edited, 56% of U.S. retailers’ assortments are currently on sale, up from 35% during the same week last year. The share of discounted merchandise has been on the rise since early March, when coronavirus fears began to escalate around the country.
Department stores — already facing a challenging outlook due to shifting consumer tastes and falling brick-and-mortar traffic — have slashed prices almost across the board. Nordstrom is advertising a clearance sale with discounts up to 60% off, along with 40% off some in-season items. Saks Fifth Avenue is offering as much as 75% off on brands like Chloé, Stuart Weitzman and Rag & Bone, while Neiman Marcus — reportedly in talks to file for bankruptcy as it struggles with billions of dollars in debt — is promoting 40% off a wide selection of inventory.
Even brands that don’t usually go on sale are changing their strategies to keep cash flow going during the crisis: Direct-to-consumer brand M.Gemi is running a 25% off sale on select styles, as well as $50 off for new customers who sign up to receive texts. Everlane, meanwhile, held its first sitewide sale at 25% off at the beginning of the month and has since extended its “choose what you pay” model to hundreds of styles.
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With so many people at home all day on their phones and laptops, site traffic is up for apparel and luxury retailers, according to Bloomreach, a digital experience software company. Revenues, however, have fallen due to discounting and a more cautious consumer environment. In the luxury category, site traffic was up 4% for the week of April 5 over the previous week, but sales declined 2%. Those who are shopping right now are looking for deals: two of the top five searches in the category included the word “sale.”
“As retailers and brands adapt to how customers use their discretionary spending and aim to decrease inventory, we may continue to see a squeeze on sales and margins in spite of high e-commerce traffic,” said Bloomreach Chief Strategy Officer Brian Walker.
While they try to move existing inventory — and while e-commerce operations like product photography are largely on hold — retailers have also choked off new arrivals. According to Edited, the number of new styles posted by U.S. retailers is down 64% over last year. In the U.K., where several large online retailers have temporarily closed up shop, there are 70% fewer new arrivals this week compared to the same period last year.