Executive Briefings

More 'Sophisticated' Product Placement Seen Among Retailers, Study Says

Analysis of 2013 and 2014 holiday sales data on 300,000 products indicated more sophisticated retail product management, higher quality merchandise offered at discounted prices, and promotions extended after the holiday season, suggesting a promotion trend retailers are likely to apply for the 2015 holidays and beyond.

As Upstream Commerce, a retail industry intelligence firm, analyzed holiday sales data on seven major fashion retailers, it found a decrease in the end-of-life products offered at a discount during the holiday season, hinting that the retailers were more selective of which products were discounted. In addition, analysis showed an increase in the amount of promotions that were running into mid-January, hinting at a trend of promotions running past the holiday season.

Upstream Commerce's analysis revealed that the amount of discounted products that were discontinued decreased in 2014 (compared to 2013). For example, Amazon discontinued only 17% in 2014 compared to 25% in 2013; Neiman Marcus reduced its amount of non-available products from 39% to 25%.

Upstream Commerce believes that in 2013 retailers were still promoting products approaching end of life, but in 2014 they were using different criteria.

"We are certain the change in trend in 2014 is not due to excess inventory that was created, which took retailers longer to move," says Upstream Commerce CTO and co-founder Shai Geva. "As retailers have improved their inventory management practices over the last couple of years, it is clear that the trend we are seeing is because retailers are investing greater efforts in discounting the right products, rather than those close to end-of-life."

"There may be fewer promotions in 2015 (both in total discount and in the depth of reductions), but we will see 'higher quality' promotions," says Geva. "That is to say, the consumer will benefit from a more recent selection in lower prices, while retailers can see better results. And, as in the previous years, the promotions will extend past the holiday season," Geva concludes.

Source: Upstream Commerce

As Upstream Commerce, a retail industry intelligence firm, analyzed holiday sales data on seven major fashion retailers, it found a decrease in the end-of-life products offered at a discount during the holiday season, hinting that the retailers were more selective of which products were discounted. In addition, analysis showed an increase in the amount of promotions that were running into mid-January, hinting at a trend of promotions running past the holiday season.

Upstream Commerce's analysis revealed that the amount of discounted products that were discontinued decreased in 2014 (compared to 2013). For example, Amazon discontinued only 17% in 2014 compared to 25% in 2013; Neiman Marcus reduced its amount of non-available products from 39% to 25%.

Upstream Commerce believes that in 2013 retailers were still promoting products approaching end of life, but in 2014 they were using different criteria.

"We are certain the change in trend in 2014 is not due to excess inventory that was created, which took retailers longer to move," says Upstream Commerce CTO and co-founder Shai Geva. "As retailers have improved their inventory management practices over the last couple of years, it is clear that the trend we are seeing is because retailers are investing greater efforts in discounting the right products, rather than those close to end-of-life."

"There may be fewer promotions in 2015 (both in total discount and in the depth of reductions), but we will see 'higher quality' promotions," says Geva. "That is to say, the consumer will benefit from a more recent selection in lower prices, while retailers can see better results. And, as in the previous years, the promotions will extend past the holiday season," Geva concludes.

Source: Upstream Commerce