With the global average of products on sale at 29.88% in the 1st week of November, the US eCommerce, with 21.79%, falls considerably below – as found in the DataFeedWatch by Cart.com research of 14.000 online stores across 60 countries. Canada was even lower with 15.38%. Most European retailers discounted 30%, 40%, or even 50% of their product catalogue.
In data collected in April 2022 from the Feed Marketing Report, 26.49% of products were on sale, compared to 29.88% in the first week of November. It’s a moderate increase (3.39%) and certainly not what market experts predicted, especially with consumers’ price sensitivity constantly increasing due to global inflation and an expected recession.
Discount champions from Europe
Three countries have higher ratios of discounted vs. non-discounted products and they are all from Europe: Finland 55.21%, Italy 54.29%, and Spain 50.29%. Three countries have discounted more than 40% of their product catalogue: the United Arab Emirates at 43.32%, Australia at 41.16%, and New Zealand at 40.89%.
And the remaining countries and regions above the global average (29.88%): the United Kingdom 36.40%, Norway 36.06%, the Netherlands 34.22%, and Southeast Asia 32.83%. Those below the global average include LATAM at 28.19%, East Asia (27.17%), Denmark (26.28%), Germany (24.30%), Sweden (22.77%), finally the US at (21.79%), and Switzerland (20.31%).
What is really happening?
We have analyzed the data with Peggy Anne Salz – content strategist, chief analyst and founder of Mobilegroove, tech journalist & podcast host, and writer for Forbes, Pocket Gamer, and Harvard Business Review. What did she say?
“These findings provide a new lens to view much more than the leaders and laggards in catering to cash-strapped consumers across major markets. They also give us unique insights into the relationship between discounts and disruption. Regions hardest hit by the supply chain crisis of 2022 are stuck between a rock and a hard place. They can offer discounts and risk running out of
stock on items without knowing when and if they can restock their digital shelves. Or they can ignore their price-sensitive shoppers altogether and watch as customers flock to rival marketplaces that offer low prices and high inventory.”
“Beyond these macro-trends, the data suggests regions such as Europe are home to a new breed of discount champions when in reality, it reveals a massive gap between consumers’ desire for discounts and retailers’ willingness to offer them. Deals in these countries may be on the rise, but prices still hover at the high end of the scale. The U.S. is no longer leading the pack because retailers and merchants there have offered discounts for decades and still see their audiences and profits dwindle. Rather than compete on the slippery slope of price, many are racing to reinvent the value they offer and the benefits – not bargains – they provide.”
Availability influences global discounts
The least number of discounted products are across eCommerce merchants in Ireland 18.13%, Canada 15.38%, and France 10.94%.
“There is a good reason the DataFeedWatch research shows France and Ireland have so few products discounted – it’s low product availability”, says Jacques van der Wilt, General Manager Feed Marketing at Cart.com.
“Ireland with 43.8% of products out of stock currently has the lowest product availability. France takes second place with 37.7% of products unavailable. These numbers translate directly into a low amount of products on sale”, explains the data feed expert.
Extreme discounts are over
33.18% is the global average discount value in the eCommerce sector across more than 60 countries. But the numbers fluctuate, with 24.96% the lowest value and 44.50% the highest. The majority have a discount value between 29% and 36%.
The leaders are the United Kingdom with a discount value of 44.5%, Australia 44.1% and Germany 41.2%. Lowest average discount values were in Ireland 24.96%, LATAM countries 26.81% and South East Asia 27.65%.
The United States presents a moderate 29.15%, slightly below the global average. Yet Canada with 39.71%, significantly exceeds it.
“We see fewer differences in discount values compared to the number of products on sale in various countries. Producers, merchants, and retailers seem to have similar price vs. value ratio perception and discount strategies regardless of country or region”, says Jacques van der Wilt, General Manager of Feed Marketing at Cart.com.
Discounts vs. increasing value
There are two main variables that drive discount policies for most eCommerce retailers, regardless of geography and strategy – product availability and product margin. They then focus on advanced strategies of prospect acquisition, customer lifetime value, and discount functions such as the liquidation of old stock.
Predominantly merchants are eager to give discounts if they have the product in stock, can easily resupply it, or have large enough margins to share with their customers.
There is however a strong drive towards finding new ways to increase and provide additional value to customers. More and more companies now advertise long-term solutions, products with longevity, and products that you can repair when a fault emerges. Is additional value a new form of discount? A way to attract attention and make more sales?
