Retail was all about promotions in 2016, reveals study

Feb. 1, 2017

Nearly half, 44 percent, of orders in 2016 were sold on a promotion and 67 percent were sold on a markdown, according to new data from the DynamicAction Retail Index.

“This rampant promotional and markdown activity led to a 24 percent margin reduction for North American retailers in 2016. Retailers are also entering 2017 with merchandise returns on the rise, already up 23 percent for the year versus January 2016,” state a release on the report.

Additional key insights: 

  • Merchandise returns were up an average 8 percent during 2016 and an average 18 percent for the holidays in North America
  • There were fewer late shipments, and free shipping was used on less orders during the holiday season
  • Free shipping is still a consumer expectation, and an average 42 percent of orders shipped free in 2016, in line with 2015 numbers. 

“The consumer mindset has been hardwired to wait for a sale, and retailers continue to reinforce this wiring with ceaseless promotions in all channels,” said Sarah Engel, SVP of global marketing for DynamicAction, in the release. “As we enter 2017, retailers are more aware than ever that they need to re-engineer their strategies to balance customer expectations with the profit demands of the business.”