To discount or not to discount? This is the inevitable question on the minds of marketers as the third quarter approaches. The factors to consider, however, seem to grow each year.
Over the past few weeks, Glossy has reported on the discount fatigue felt by shoppers, the growing anti-Black Friday movement and the brands that won Black Friday without offering a single discount. Still, to boost revenue during big sales periods, competing through promotions often feels vital. According to Shopify, its merchants drove a record-high $9.3 billion in sales from Black Friday to Cyber Monday this year — a 24% year-over-year increase — with shoppers spending $4.2 million per minute during the most profitable moments of the weekend.
Today’s Confessions subject offers a different perspective: There’s power in the once-yearly sale. Our subject has successfully grown more than one brand that is now a household name and currently serves as the head of marketing at a top mid-tier beauty brand. The brand is less than five years old, has omnichannel distribution and only offers one modest sale each year, which it holds on Black Friday.
This strategy is a lower lift than many others and, according to the team, the sale this year was a massive success. The brand’s repeat revenue over Black Friday increased by multiples, and its average order value on direct-to-consumer sales increased by 40% year-over-year.
The details of the brand have been removed to protect the subject’s privacy, but the conversation ahead touches on brand value, loyal clientele and the traps brands can fall into while trying to compete for sale shoppers.
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Your résumé as a marketer is so impressive. Even before we’d met, I had been following the brands you’ve worked on — you’ve made maintaining brand value look easy, even through sale seasons like we’re in now. What do you think about discounting: Is it good or bad for a healthy business?
“It depends on the behavior you’re trying to encourage. Offering constant discounts frames a behavior. So if a customer comes in on a discount code — and I’ve seen this in other businesses I’ve worked in — then the next time they come, they try to use the same code or they expect to have the same discount, which is a fair expectation. This is one of the reasons we don’t do welcome discounts or frequent influencer discounting. A sale only happens once a year, which is intentional.”
That’s so true. I will sometimes do a quick search for a coupon code, but only for certain sites I know offer them.
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“Exactly. People are smart. If there’s a code out there, they’ll find it. So using them infrequently and effectively is key. The same goes for constant discounting. It’s subconscious training for consumers. If you’re always 40% off, that’s the value they associate with the brand.”
So do you think that participating in a single sales event, like Black Friday, can have a negative impact on brand value?
“I don’t think there’s an impact, as long as it’s not a regular thing. We only have one sale a year — and we say that very clearly, which is pretty uncommon. Brands have to say what they mean. If you say something’s limited-edition, and then three days later it comes back, that’s a problem. Your customer may have rushed to buy it because it was limited. If it’s limited, it has to be limited. If it’s once a year, it has to be once a year. You really have to stick to what you promise.
People remember it; it’s like human relationships. So you have to be honest about it, and then you set the expectation. Our customer knows our sale is once a year, so now we’re seeing that 40% increase in average order value because they know we’re serious about it. They stock up because it’s true. If we did a sale again in January, then we’d be undermining what we promised.”
In your opinion, what should the main purpose of a yearly sale be?
“[Sales should be] a benefit you offer an existing consumer who loves your product so that they come to your site and repeat. Or you offer it to someone who’s really close to purchasing — but not [to someone] in the upper funnel. I think trying to bring in upper funnel customers during a sale is a mistake that a lot of brands make.”
I heard Black Friday was tough for many brands. How did it go for your team?
“Our average order value on direct-to-consumer was 40% higher this year than it was last year. It was also above our year-to-date average, even after the discount was applied — which is fascinating because I’ve heard exactly what you’ve heard: that it was a pretty tough Black Friday for a lot of brands. I think, ultimately, people are just looking for value, and that is not necessarily best communicated in the form of a discount.”
What’s a better approach to being competitive than offering deep discounts?
“Offering things like free expedited shipping is important, because when they run out [of a product], they just need it now. [It’s important] to offer quality that extends to product, but also at every brand touchpoint.”
This time of year can feel make-or-break for many brands and retailers. How do you take the pressure off your team going into the sale season?
“We have reasonable goals for the sale, and we continue to do our marketing [as normal] ahead of that. No one really talks about the fact that your Black Friday — or your Q4 performance, in general — is really made in Q3. You have to fill your funnel months in advance. If you think of how we behave, you’re not discovering brands on Black Friday, right? Sale shoppers should already be in your consideration set.
It’s much smarter [for a brand] to put pressure and investment elsewhere than to put all your pressure and investment into the most competitive days of the year.”
In a perfect world, how do you win the sale once the customer is on the site and ready to shop?
“Providing assisted shopping is important, because shade matching is huge during Black Friday. People are really looking for the final details that would push them to convert.”
What’s another thing that you know makes a big difference?
“We invest a lot in customer experience, and by that, I mean actual people. We have a pretty big customer experience team that’s online [throughout Black Friday] to help people troubleshoot because patience is low and people have a lot going on. Brands are often thinking about being the loudest, but I think making offering the most seamless experience is the key.”
What kind of social media content did well during the sale for you?
“It’s more important to try to be relevant [than to promote the sale]. Interestingly, one of the posts that did the best for us over that week was a lifestyle post that didn’t push products. That was one of the most highly engaged posts because, in all the noise of Black Friday, cutting through with something a little more human is really effective.”
That is the exact opposite of what I saw on social media this year. Many brands began to shift their marketing focus to Black Friday days or even weeks ahead…
“When you downturn your marketing in the months prior [to a sale like Black Friday or after-Christmas], you actually do yourself a bigger disservice. I would rather turn up my marketing in the months prior, and then spend less and not compete on high CPMs [cost per thousand of impressions] over Black Friday to get a better performance overall.”
In your experience, what are the other traps of competing for sale shoppers?
“Our return rates are actually very stable after Black Friday — still very low. But there are a lot of brands, especially if they’re pushing high discounts to younger consumers, that then get very high returns, in waves. There’s kind of this panic buying that happens.”
Another complaint I hear from shoppers is about sale exclusions. What is your point of view on sale exclusions?
“Sometimes, from a business perspective, brands have no choice. The margins on merch or on holiday sets are very different from margins on your core products. There’s no right answer because it is very logical to exclude things, but I think it ends up feeling punitive and disappointing for the shopper, which isn’t necessarily fair.”
I also feel like the sale season starts earlier and earlier every year.
“And a lot of brands offered bigger discounts this year than they did last year. In my opinion, fundamentally, if you keep extending the time and you keep lowering the discount, it’s damaging.
I keep it really simple, because the moment you start jockeying [for attention online] by adding in days, you just spread revenue out — you don’t actually make more. And then you have this incredibly long period of time where all you’re doing is talking about a sale, which is counterintuitive to brand value.
At the end of the day, if you get pulled into the comparison race, it is only ever a distraction from the fundamentals of the business. It slows you down.”
Editor’s Note: For our Confessions series, we provide anonymity to fashion and beauty industry insiders to allow them to openly share their perspectives and give readers genuine insight. The author of a Confessions story is aware of the identity of the speaker and has validated their title and position.
