A comparison of the contrasting promotion strategies of Debenhams and Boohoo.
If you scan through news articles about retail in 2017 and 2018, you’ll see the theme ‘slowdown’ more than anything else. We all know that retail has been going through a rough patch in the last few years, with over 7,500 store closures in 2018 alone.
Talking about the UK, 2019 started optimistically. In the three months to May, retail sales expanded 1.6 per cent compared with the previous three-month period. But then April and May saw a dip again, which some people are attributing the the unseasonably cold weather.
With weakening demand and uncertainty around Brexit, shoppers are more skeptical and price sensitive, especially when it comes to fashion. It’s interesting to see how the major fashion retailers are using promotions and discounts to drive their sales.
We have seen two kinds of distinct discount strategies being adopted by Debenhams and Boohoo, two of the best known names in UK’s fashion retail. Here are the details:
Debenhams launched its ‘Blue Cross Sale’ on 27th June, where it advertised a catchy “Upto 70% off” message. This sale lasted for a little over a week.
In fact, Debenhams has been doing quite a few ‘week long’ sales on their website in the last few months. We clearly see the increase in number of products that are on a discount, usually for a period of 7–10 days.
But here’s where it gets interesting — corresponding to all these dates, there is a noticeable dip in the average discount offered!
What this means is, while a majority of products in their catalogue are discounted for the sale, the actual discount being offered per product is actually lower than on the regular days.
Missguided also opted for the same strategy in June.
In contrast to Debenhams and Missguided, Boohoo does not have weekly sales. They go by the ‘Sale is always on’ strategy. They always have almost the entire catalogue on sale (99% products!).
But all through the sale, the actual discount on products is significantly lower than that of the other big UK retailers. Boohoo fares at appx. 30% average discount on its catalogue, while the others are between 44% and 47%.
A sale isn’t as simple as it sounds. There’s a lot going on behind the scenes. Especially if you work in retail, these are more than just ‘good to know’ statistics. Having the right insights into competitors can help you create your winning strategies!
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