November overtakes December as new top retail month, but discounts could threaten profits

Research released this month shows that November has overtaken December as the biggest month of the year for retailers, with the rise of discount periods around Black Friday and Cyber Monday.

Analysis from customer relationship experts Optimove has found that the total order amount for retailers was 32% more in November than in December, which has traditionally been seen as the prime selling time for retailers.

But against a background of mixed results from UK retail giants, retailers must be careful that their discounting strategies translate into long-term revenue growth, warns Optimove chief executive Pini Yakuel.

“Around the Christmas and holiday period, customers are beginning to buy online earlier,” Pini comments. “According to our analysis, the busiest shopping days in December were actually the 5th and 6th.

“The growing popularity of Black Friday and Cyber Monday are attracting large orders, but instead of increasing overall sales, this may just encourage shoppers to buy earlier at a discount where they would previously have bought later in December for full price. This December saw a 10% lower order total than the year before.

“Whilst heavy discounting can bring in more customers in the short term, retailers must be sure that this adds real value to overall annual revenue. We have found that heavy discounts of more than 30% do not usually encourage customers to come back to the brand again, unless it is for similarly discounted items. One-off sales are important, but brands must focus on getting customers to return again throughout the year.”