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Cyber Monday is coming early this year.
As a result of widespread temporary and, in some cases, permanent store closures across the U.S., inventory pileups are forcing retailers to offer rare discounts on full-price goods.
Read:Retail sales crater a record 16.4% in April amid coronavirus lockdowns and spending slump
Between March and April prices for apparel dropped by 12% — that’s four times higher than what is typically expected for this time of year, according to the Adobe Digital Economy Index ADBE, +0.73%, a report which analyzed one trillion online transactions across 100 million product categories.
“ ‘Retailers will not want to go into summer with excess inventory, so if shoppers find something at a good deal now, it’s a good idea to jump on it.’ ”
That’s akin to the scale of discounting that consumers would otherwise have to wait until November to see, said Vivek Pandya, lead analyst for Adobe Digital Insights.
“Apparel is experiencing discounting in April that is akin to the scale of discounting that certain categories experience during the Black Friday through Cyber Monday holiday sales period,” according to a report last week by Adobe.
Flash sales are also a tactic retailers are using to lure consumers into buying footwear, said Stacey Widlitz, president of consulting group SW Retail Advisors. In recent weeks, brands like Puma PMMAF, +3.60% and Nike NKE, +4.65% have offered 25% off everything on their sites. That’s also been true of Under Armour UAA, +6.74% UAA, +6.74%.
“You wouldn’t normally see that at this time,” Widlitz said. “You would see mid-season sales and select SKUs that don’t work but you wouldn’t see 25% off everything,” she said, “It’s really Cyber Monday in the spring.”
That trend is expected to continue throughout this month, but analysts say it won’t last long since retailers will desperately need to restore their profit margins. “Now would be a good time to stock up on your apparel needs,” Pandya said.
Typically, retailers wait until Memorial Day to discount apparel “to clear up inventory.” However, those sales are happening earlier in anticipation of consumer’s reluctance to spend money on non-essential items.
“ In recent weeks, brands like Puma and Nike have offered 25% off everything on their sites. ”
“Retailers will not want to go into summer with excess inventory, so if shoppers find something at a good deal now, it’s a good idea to jump on it,” said Sara Skirboll, a shopping and trends expert for RetailMeNot, an online database of coupons.
“With Memorial Day weekend on the horizon, shoppers can expect to see some of the best offers all year long for things like mattresses, select appliances, home and garden and even automotive items,” Skirboll added.
Some retailers, instead of putting items on clearance, are packing away their inventories for next year. But “you can’t really do that with footwear because it’s become so fashion-oriented which means the styles could be stale by next year,” Widlitz said.
Also read:Bottoming out? U.S. consumer sentiment improves in May as households buoyed by massive federal aid
The Gap GPS, +2.89% and Old Navy were on “the discount treadmill” before coronavirus upended the U.S. economy, Widlitz said. In March, Gap reported a 5% same-store four-quarter sales decline at the namesake stores, and flat same-store sales at Banana Republic.
“Now it’s blanket promotions and flash sales” at stores like Nike she said, “that’s not normal.”
Undoubtedly, it’s not a good sign for retailers. “You’re going to see full-price items going directly to outlets in the coming months,” Widlitz said.
